Acca financial Accounting (FA) Study Text ac ca (FA)

How much is due to the tax authority for the quarter? 

$________ 

 

13 

The revenue account is:

 

A 

credited with the total of sales made, including sales tax 

B 

credited with the total of sales made, excluding sales tax 

C 

debited with the total of sales made, including sales tax 

D 

debited with the total of sales made, excluding sales tax 

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Chapter 23 

KAPLAN PUBLISHING

 

465 

14 

If sales (including sales tax) amounted to $27,612.50 and purchases 

(excluding sales tax) amounted to $18,000, the balance on the sales 

tax account, assuming all items are subject to sales tax at 17.5%, 

would be: 

A $962.50 

debit 

B $962.50 

credit 

C $1,682.10 

debit 

D $1,682.10 

credit 

15  A new entity was formed with an initial issue of 1,000 shares for $1 cash 

per share. Inventory costing $800 net of sales tax at 17.5% was 

purchased on credit. Half of this inventory was then sold for $1,000 plus 

sales tax, the customer paying promptly in cash.