1.

A retailer that collects sales taxes is acting as an agent for the

taxing authority.

wholesaler.

customer.

chamber of commerce.

2.

If an account is collected after having been previously written off

both income statement and balance sheet accounts will be affected.

there will be both a debit and a credit to accounts receivable.

only Accounts Receivable is credited.

the allowance account should be debited.

3.

You have just received notice that a customer of yours with an account receivable balance of $100 has gone bankrupt and will not make any future payments. Assuming you use the allowance method, the entry you make is to

debit Allowance for Doubtful Accounts and credit Bad Debt Expense.

debit Bad Debt Expense and credit Allowance for Doubtful Accounts.

debit Bad Debt Expense and credit Accounts Receivable.

debit Allowance for Doubtful Accounts and credit Accounts Receivable.

4.

Sales taxes collected by a retailer are reported as

revenues.

current liabilities.

contingent liabilities.

expenses.

5.

A cash register tape shows cash sales of $5900 and sales taxes of $295. The journal entry to record this information is

Cash	6195
Sales Tax Revenue		295
Sales Revenue		5900

Cash	5900
Sales Revenue		5900

Cash	5900
Sales Tax Expense	295
Sales Revenue		6195

Cash	6195
Sales Revenue		5900
Sales Taxes Payable		295

6.

Cheyenne has collected $820 in sales taxes during March. If sales taxes must be remitted to the state government monthly, what entry will Cheyenne make to show the March remittance?

Sales Tax Expense	820
Cash		820

No entry required.

Sales Taxes Payable	820
Cash		820

Sales Tax Expense	820
Sales Taxes Payable		820