When a company makes a sale and charges GST on the sale, the entry to record the sale will include which of the following?

Question

Quizplus · Accepted Answer

When a company charges GST on a sale, it is collecting GST on behalf of the government, which means the GST collected is a liability for the company until it is remitted to the government. Therefore, the correct entry includes a credit to GST payable, indicating an increase in the company's liability.

When a Company Makes a Sale and Charges GST on the Sale