Cantrell company is required by law to collect and remit sales taxes to the state. if cantrell has $8,000 of cash sales that are subject to an 8% sales tax, what is the journal entry to record the cash sales?

$ 8,000 cash (debit)

$ 8,000 cash sales (credit)

($ 640)% 8 sales tax (credit)

For cash sales transactions, recording the VAT journal is not complicated, especially if the cash sales do not experience returns in the future.

Further Explanation

VAT Journal can be interpreted as accounting records of Value Added Tax (VAT) attached to a transaction, both sale and purchase transactions.

VAT journal making by recording every purchase or sale transaction of Taxable Goods / Services is needed as an analytical function to determine the estimated debit and credit estimate and their respective amounts. In addition, the production of VAT journals is also required to record any company activities related to VAT.

The procedure for accounting or making VAT journals consists of three factors, namely: Purchase of Taxable Goods / Services, where VAT can be credited and which cannot be credited. Sales and VAT are outstanding. VAT accrued and overpaid VAT. Meanwhile, the method for recording PPN journals consists of three methods, namely: Input VAT and output VAT are recorded at one estimate. Bookkeeping in this way, using only one estimate, namely VAT, the balance may be debit or credit, depending on which is greater between the input tax or output tax for a particular tax period. Input VAT and output VAT are recorded separately, without offset procedures at each tax period. In this way, the balance of each estimate will increase continuously due to the accumulation of input VAT and output VAT during a certain period. Input VAT and output VAT are recorded separately, with offset procedures at the end of each tax period. The accounting procedure up to the deposit of the difference between input VAT and output VAT to the state treasury or receipt of restitution is the same as the accounting procedure in the second and second ways. At the end of the tax period, journaling is carried out to offset estimates of input VAT and output VAT upon completion of the VAT tax period of the month concerned.

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VAT

Taxable Goods

Details

Class: College

Subject: Business

Keyword: sales, cash, VAT