When a company collects sales taxes,the debit is to Cash and the credit is to Sales Tax Payable.

Name: When a company collects sales taxes,the debit is to Cash and the credit is to Sales Tax Payable.
Brand: Quizplus
Rating: 4.9 (46 reviews)

Question

Quizplus · Accepted Answer

This is the standard accounting treatment for collecting sales taxes. The debit to Cash reflects the increase in cash received by the company, while the credit to Sales Tax Payable records the liability to remit the collected taxes to the appropriate tax authority.

When a Company Collects Sales Taxes,the Debit Is to Cash