During the month, a company sells goods for a total of $108,000, which includes sales taxes of $8,000; therefore, the company should recognize $100,000 in Sales Revenues and $8,000 in Sales Tax Expense.

Question

Quizplus · Accepted Answer

Sales taxes collected from customers are not an expense for the company; they are a liability. The company should recognize $100,000 in Sales Revenues and $8,000 as Sales Tax Payable.

During the Month, a Company Sells Goods for a Total