The amount of sales tax collected by a retail store when making sales is
A) miscellaneous revenue for the store.
B) a current liability.
C) not recorded because it is a tax paid by the customer.
D) recorded as an operating expense.

Question

Quizplus · Accepted Answer

Sales tax collected by a retail store is not the store's income; it is collected on behalf of the government. Therefore, it is recorded as a current liability on the store's balance sheet until it is remitted to the government.

The Amount of Sales Tax Collected by a Retail Store