When a company collects sales tax from a customer,the event is recorded by:
A)A debit to Sales Tax Expense and a credit to Sales Tax Payable.
B)A debit to Cash and a credit to Sales Tax Payable.
C)A debit to Sales Tax Payable and a credit to Sales Tax Expense.

Question

Quizplus · Accepted Answer

When a company collects sales tax from a customer, it is recorded as a debit to Cash (since the company is receiving cash) and a credit to Sales Tax Payable (since the company owes this amount to the government). Option A is incorrect as it debits the expense account instead of cash. Option C is incorrect as it credits the expense account instead of Sales Tax Payable.

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