Question

The Town of Little River expects to collect $90,000 in sales tax from the state government within 30 days of the end of fiscal year 2020 for retail sales taking place in fiscal year 2020. What entry, would Little River make at the end of 2020

Answer 1

Answer:

D. Due from state government 90,000 Revenues control 90,000

Explanation:

Since the town of little river still expects to collect $90,000 in sales tax from the state government within 30 days after then end of fiscal year 2020 for retail sales taking place in fiscal year 2020 but have not yet received the cash or amount, it will be entered into the account as Due from state government $90,000. Money is due because as stated earlier, the little town isn't receiving it during that fiscal year but rather within 30 days after the fiscal year. It would also be entered as revenue control of $90,000.