Ed's Bookstore has collected $750 in sales taxes during April. If sales taxes must be remitted to the state government monthly, what entry will Ed's Bookstore make to show the April remittance?
a. $\begin{array}{lrr}
\text { Sales Taxes Payable } &750\
\text { Cash } &&750\
\end{array}$

b.
$\begin{array}{lrr}
\text { Sales Tax Expense } &750\
\text { Cash} &&750\
\end{array}$

c.
$\begin{array}{lrr}
\text { Sales Tax Expense } &750\
\text {Sales Taxes Payable } &&750\
\end{array}$

d.$\begin{array}{lrr}
\text { No entry required. } &\
\end{array}$

Question

Ed's Bookstore has collected $750 in sales taxes during April. If sales taxes must be remitted to the state government monthly, what entry will Ed's Bookstore make to show the April remittance?
a. $\begin{array}{lrr}
  \text { Sales Taxes Payable } &750\
 \text { Cash } &&750\
\end{array}$

b.
$\begin{array}{lrr}
  \text { Sales Tax Expense } &750\
 \text {  Cash} &&750\
\end{array}$

c.
$\begin{array}{lrr}
  \text { Sales Tax Expense } &750\
 \text {Sales Taxes Payable  } &&750\
\end{array}$

d.$\begin{array}{lrr}
  \text { No entry required. } &\
\end{array}$

Quizplus · Accepted Answer

The remittance of sales taxes to the state government is recorded by debiting Sales Taxes Payable and crediting Cash. Option A is the only choice that reflects this. Option B records Sales Tax Expense which is not appropriate for this transaction. Option C records both Sales Tax Expense and Sales Taxes Payable which is redundant. Option D is not correct as an entry is required to record the remittance of sales taxes.

Ed's Bookstore Has Collected $750 in Sales Taxes During April Sales Taxes Payable 750 Cash 750\begin{array}{lrr} \text { Sales Taxes Payable } &750\\ \text { Cash } &&750\\\end{array} Sales Taxes Payable Cash ​750​750​

Ed's Bookstore Has Collected $750 in Sales Taxes During April $\begin{array}{lrr} \text { Sales Taxes Payable } &750\\ \text { Cash } &&750\\\end{array}$