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

Question

Quizplus · Accepted Answer

The amount of sales tax collected by a retail store is a liability because it is collected from the customer but the store is responsible for remitting it to the appropriate taxing authority. It is recorded as a current liability in the store's financial records until it is remitted to the taxing authority.

The Amount of Sales Tax Collected by a Retail Store