Journal Entries
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The following are selected transactions of a Detroit Company...
71. The current portion of long-term debt should
a. be paid immediately.
b. be reclassified as a current liability.
c. be classified as a long-term liability.
d. not be separated from the long-term portion of debt.
72. Sales taxes collected by a retailer are expenses
a. of the retailer.
b. of the customers.
c. of the government.
d. that are not recognized by the retailer until they are submitted to the government.
73. A retailer that collects sales taxes is acting as an agent for the
a. wholesaler.
b. customer.
c. taxing authority.
d. chamber of commerce.
74. Sales taxes collected by a retailer are reported as
a. contingent liabilities.
b. revenues.
c. expenses.
d. current liabilities.
75. A cash register tape shows cash sales of $3,000 and sales taxes of $150. The journal entry to record this information is
a. Cash 3,000
Sales 3,000
b. Cash 3,150
Sales Tax Revenue 150
Sales 3,000
c. Cash 3,000
Sales Tax Expense 150
Sales 3,150
d. Cash 3,150
Sales 3,000
Sales Taxes Payable 150
Please see attached.
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Solution Summary
This explains the concept of journal entries through examples.
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JOURNAL ENTRY
JAN 2 1.PURCHASES A/C 15000
TERESSA SPECK COMPANY 15000
FEB1 2. TERESSA SPECK COMPANY 15000
NOTES PAYABLE A/C 15000
MAR 31 3. INTEREST EXPENSE A/C 250
INTEREST PAYABLE A/C 250
APR1 4. NOTES PAYABLE A/C 15000
INTEREST PAYABLE A/C 250
CASH 15250
JULY1 5. PURCHASES A/C 35000
CASH 11000
SCOTTLE EQUIPMENT 24000
JULY1 6. SCOTTLE EQUIPMENT 24000
NOTES PAYABLE A/C 24000
Sep. 30 INTEREST EXPENSE A/C 600
INTEREST PAYABLE A/C 600
Oct1. 7. NOTES PAYABLE A/C 24000
INTEREST PAYABLE A/C 600
CASH 24600
DEC1 8.CASH 10000
TO NOTES PAYABLE 10000
Dec 31 9. INTEREST EXPENSE A/C 90
INTEREST PAYABLE A/C 90
INTEREST PAYABLE A/C
Dr. IN$ Cr. IN$
Date Particulars Amount Date Particulars Amount
APR1 ...
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