Which of the following represents the correct journal entry to record a taxable cash sale of $80 if the sales tax rate is 5%?
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A debit to cash for $80, a debit to sales tax expense for $4, and a credit to sales revenue for $84. |
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A debit to cash for $84, a credit to sales tax payable for $4, and a credit to sales revenue for $80. |
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A debit to cash for $80, a credit to sales tax payable for $4, and a credit to sales revenue for $76. |
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None of the above.
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