Chapter 11!!!!!!!!!!!!!!!!!!!!!!!!!!

Vocab

1. Customer- a person or business to whom merchandise or services are sold.
2. Sales tax- a tax on a sale of merchandise or services
3. Cash sale- a sale in which cash is received for the total amount of the sale at the time of the transaction
4. Credit Card Sale- a sale in which a credit card is used for the total amount of the sale at the time of the transaction

Concepts found in ch. 11

1. Realization of Revenue
2. Objective Evidence

Other information

Every business collecting a sales tax needs accurate records of the amount of:

1. total sales
2. total sales tax collected

Sales of merchandise may be for cash or on account.

Journal for partnership has 11 columns with new ones added for accounts receivable, accounts payable, sales tax payable, and purchases debits.

To calculate sales tax:

Multiply the total cost by the sales tax percent; in North Carolina sales tax is 7%. Add that number to the total cost.

Sales tax is a liability until paid to the state government. Tax is recorded in a separate liability account with a normal credit balance.