General Lighting

During the first quarter of the current year, the company sold 4,000 batteries on credit for $150 each plus state sales tax of 6%.

When the company records this transaction, what is the impact on the accounting equation?

Question 13 options:

	Both assets and liabilities decrease.
	Assets decrease and liabilities increase.
	Assets, liabilities, and stockholders' equity will all increase.
	Assets increase and stockholders' equity decreases.

General Lighting

During the first quarter of the current year, the company sold 4,000 batteries on credit for $150 each plus state sales tax of 6%.

The $150 price of each battery includes a $3 federal excise tax. Which of the following statements is true regarding the proper accounting treatment for the taxes related to this transaction?

Question 14 options:

	They are recorded as additions to revenue.
	They are recorded as unearned revenues on the company's balance sheet.
	They are recorded as a current liability owed to the taxing authority.
	They are recorded as expenses in the same period as the corresponding sales revenue.

General Lighting

During the first quarter of the current year, the company sold 4,000 batteries on credit for $150 each plus state sales tax of 6%.

The $150 price of each battery includes a $3 federal excise tax. Which of the following statements is true regarding the proper accounting treatment for the taxes related to this transaction?

Question 14 options:

	They are recorded as additions to revenue.
	They are recorded as unearned revenues on the company's balance sheet.
	They are recorded as a current liability owed to the taxing authority.
	They are recorded as expenses in the same period as the corresponding sales revenue.