When a company collects sales tax from a customer,the event is recorded by:

Name: When a company collects sales tax from a customer,the event is recorded by:
Brand: Quizplus
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Question

Quizplus · Accepted Answer

When a company collects sales tax from a customer, they receive cash, which is recorded as a debit to Cash. However, they also have a liability to pay the collected sales tax to the government in the future, which is recorded as a credit to Sales Tax Payable. Therefore, the correct answer is a debit to Cash and a credit to Sales Tax Payable.

When a Company Collects Sales Tax from a Customer,the Event