Don's Pharmacy has collected $600 in sales taxes during March. If sales taxes must be remitted to the state government monthly, what entry will Don's Pharmacy make to show the March remittance?
A) Sales Tax Expense 600 Cash 600
B) Sales Taxes Payable 600 Cash 600
C) Sales Tax Expense 600 Sales Taxes Payable 600
D) No entry required.

Question

Quizplus · Accepted Answer

The correct entry is to debit Sales Taxes Payable and credit Cash, as the liability for sales taxes collected is being settled by remitting the amount to the state government.

Don's Pharmacy Has Collected $600 in Sales Taxes During March