Sales taxes collected from customers by the seller are not an expense,instead they represent current liabilities payable to the government.

Question

Quizplus · Accepted Answer

Sales taxes are a liability for the seller as they have collected the tax from the customer on behalf of the government, and they are required to remit the tax to the government. Therefore, sales taxes collected by the seller represent current liabilities payable to the government, and not an expense.

Sales Taxes Collected from Customers by the Seller Are Not