CIMA BA3 · Chapter 4 · Question 5 of 10
A business that is registered for sales tax sells goods on credit for $2,450 excluding sales tax. Sales tax is charged at 20%. What amount is credited to the sales tax account?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) $490
Explanation
Sales tax = 20% x $2,450 = $490. The customer is invoiced $2,940: receivables are debited $2,940, sales credited $2,450 and sales tax credited $490.
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