Taxable materials are $12,500 and the supplied sales tax rate is 7.75 percent. What sales tax amount should be accrued?
Correct Answer
A) $968.75.
Sales tax is $12,500 x 7.75 percent = $968.75.
Why This Is the Correct Answer
Sales tax is $12,500 x 7.75 percent = $968.75.
Why the Other Options Are Wrong
Option B: $775.00.
$775.00. is below the supported result for sales and use tax calculation; it likely uses the wrong base, period, or account bucket.
Option C: $875.00.
$875.00. is below the supported result for sales and use tax calculation; it likely uses the wrong base, period, or account bucket.
Option D: $1,250.00.
$1,250.00. is above the supported result for sales and use tax calculation; it likely adds an unsupported amount or compares the wrong financial base.
Memory Technique
Sales And Use drawer for Checking Material: label tax before counting dollars.
Reference Hint
Study anchor (closed-book): memorize Sales and use tax calculation from CSLB Law and Business Study Guide; California Department of Tax and. / California Department of Tax and Fee Administration construction contractors tax.; know the rule or calculation trigger without relying on exam-room lookup.
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