Which of the following represents the correct journal entry to record a taxable cash sale of $400 if the sales tax rate is 5%?
A. A debit to cash for $420, a credit to sales tax payable for $20, and a credit to sales revenue for $400.
B. A debit to cash for $420, a debit to sales tax expense for $20, and a credit to sales revenue for $400.
C. A debit to cash for $400, a credit to sales tax payable for $20, and a credit to sales revenue for $380.
D. None of these answer choices are correct.
Answer: A
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