Question

When a customer charges merchandise he purchases, what accounts are affected and how?
A

Sales Debit, Sales Tax Payable Debit, and Accounts Receivable Credit.
B

Purchases Debit,and Accounts Payable Credit.
C

Sales Credit, Sales Tax Payable Credit, and Accounts Receivable debit.
D

Purchases Debit and Cash Credit.

Answer 1

When a customer charges merchandise they purchase (which typically means they are buying on credit), the accounts affected would be:

C. **Sales Credit, Sales Tax Payable Credit, and Accounts Receivable Debit.**

Here's how it works:

1. **Sales** is credited to recognize the revenue from the sale.
2. **Sales Tax Payable** (if applicable) is credited to account for the sales tax that the store has to pay to the government.
3. **Accounts Receivable** is debited to show that the store is owed money for the merchandise sold on credit.

Therefore, option C accurately describes the accounts affected in this transaction.