1. XZ Co purchased goods at a cost of $450, including sales tax of 20%. What accounting entries should XZ Co make to record this transaction in the general ledger?
A
Debit: Purchases $450
Credit: Payables $540
Debit: Sales tax $90
B
Debit: Purchases $375
Debit: Sales tax $75
Credit: Purchases $375
Debit: Payables $450
Credit: Sales tax $75
C
Debit: Purchases $375
Debit: Sales tax $75
Credit: Payables $450
D
Debit: Payables $375
Credit: Purchases $450
Debit: Sales tax $75
2. A payment is made with a 5% discount. The net cost is $450. What accounting entries should be made?
C
Debit: Payables $540
Credit: Bank $513
Credit: Discount received $27
3. A payment is made with a 5% discount. The net cost is $680 and sales tax rate is 15%. What accounting entries should be made?
C
Debit: Payables $782
Credit: Bank $742.90
Credit: Discount received $39.10