When making sales,the sales taxes received are:
A)Revenue.
B)A liability.
C)An expense if incurred.
D)A reduction in inventory value.

Question

Quizplus · Accepted Answer

Sales taxes are collected on behalf of the government and are therefore a liability until they are remitted to the government. They are not considered revenue because they do not represent income earned by the business, nor are they an expense because they are not a cost of doing business. They do not affect inventory value.

When Making Sales,the Sales Taxes Received Are