Sales taxes collected by a retailer are recorded by
A) crediting Sales Tax Revenue.
B) debiting Sales Tax Expense.
C) crediting Sales Taxes Payable.
D) debiting Sales Taxes Payable.

Question

Quizplus · Accepted Answer

Sales taxes collected by a retailer are not revenue for the retailer; instead, they are liabilities because the retailer owes this money to the government. Therefore, they are recorded by crediting Sales Taxes Payable, indicating an increase in the liability account.

Sales Taxes Collected by a Retailer Are Recorded by