Sales Taxes Payable is debited and Cash is credited when companies send sales taxes collected from customers to the government.

Question

Quizplus · Accepted Answer

Sales Taxes Payable is a liability account, and when companies send sales taxes collected from customers to the government, they reduce the amount owed in this account. Hence it is debited. Cash is credited since it is an outflow of cash from the company's accounts.

Sales Taxes Payable Is Debited and Cash Is Credited When