Which entry could be used when dealing with sales tax?
A)Debit Sales Tax Payable and credit Sales Tax Expense
B)Debit Sates Tax Expense and credit Sales
C)Debit Cash and credit Sales Tax Payable
D)Debit Sales Tax Expense and credit Sales Tax Payable

Question

Quizplus · Accepted Answer

When sales tax is collected from customers, it is recorded as a liability. Therefore, when cash is received, you debit Cash and credit Sales Tax Payable to reflect the obligation to remit the sales tax to the government.

Which Entry Could Be Used When Dealing with Sales Tax