Loong Industries collected $17,350 of sales tax on sales to customers during the month of March. When Loong remits these collections to the government in early April, the correct journal entry will be:
A)Debit Sales $17,350; credit Cash $17,350.
B)Debit Accounts Payable $17,350; credit Cash $17,350.
C)Debit Sales $17,350; credit Sales Taxes Payable $17,350.
D)Debit Sales Taxes Payable $17,350; credit Sales $17,350.
E)Debit Sales Taxes Payable $17,350; credit Cash $17,350.

Question

Quizplus · Accepted Answer

The correct entry is to debit Sales Taxes Payable to decrease the liability and credit Cash to reflect the payment made to the government.

Loong Industries Collected $17,350 of Sales Tax on Sales to Customers