Which of the Following Represents the Correct Journal Entry to Record

Which of the following represents the correct journal entry to record a taxable cash sale of $800 if the sales tax rate is 5%?

A) A debit to cash for $840, a debit to sales tax expense for $40, and a credit to sales revenue for $800.
B) A debit to cash for $840, a credit to sales tax payable for $40, and a credit to sales revenue for $800.
C) A debit to cash for $800, a credit to sales tax payable for $40, and a credit to sales revenue for $760.
D) None of the above.

Correct Answer:

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