Illustrate the effects on the accounts and financial statements of recording the following selected transactions: a. Sold

Question:

Illustrate the effects on the accounts and of recording the following selected transactions:
a. Sold $3,400 of merchandise on account, subject to a sales tax of 5%. The cost of the merchandise sold was $2,000.
b. Paid $41,950 to the state sales tax department for taxes collected.

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...