Which Of The Following Accounts Is Credited By The Seller When Tax Is Collected On Retail Sales? (Correct answer)

What happens when you collect sales tax from a customer?

  • When you collect sales tax from customers, you increase the corresponding liability account, which is your Sales Tax Payable account. And because you collect the sales tax, you also must increase your Cash account. Your Cash account is increased by debits.

Which account is credited by the seller when tax is collected on retail sales?

The answer is the Sales Tax Payable.

Which of the following accounts is credited by the seller when tax is collected on retail sales a Accounts Payable B unearned revenue C sales tax payable D payroll tax?

A) Accounts Payable B) Payroll Tax C) Sales Tax Payable D) Unearned Revenue QUESTION 24 Mars Company had cash sales of $10,000. The state sales tax rate is 10.8%. What amount is debited to the Cash account? A) $10,000 B)

What account is collected sales tax held in?

The Sales Tax Payable is a liability account in the balance sheet that keeps track of the sales tax collected from the customers on behalf of the governing tax authority. The business holds these funds and is liable for remitting them to the government on a timely basis.

How do you account for sales tax collected?

To record received sales tax from customers, debit your Cash account, and credit your Sales Revenue and Sales Tax Payable accounts. When you remit the sales tax to the government, you can reverse your initial journal entry. To do this, debit your Sales Tax Payable account and credit your Cash account.

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Which of the following items is a current liability?

Examples of current liabilities include accounts payables, short-term debt, accrued expenses, and dividends payable.

Which of the following correctly describe the accounting treatment for interest payable?

Which of the following correctly describes the accounting treatment for interest​ payable? It is shown on the balance sheet as a current liability. If a​ long-term debt is paid in​ installments, the business will report the current portion of the note payable as a current liability.

Which of the following accounts is debited when employees take their paid vacations quizlet?

The​ account, Vacation Expense is debited when the employee takes a paid vacation.

When a company records accrued interest on a note payable?

When a business records accrued interest, it adjusts two account balances in its general ledger. It first debits its interest expense account by the amount of the accrued interest. In accounting, a debit increases an expense account.

Is federal income taxes payable a current liability?

Understanding Income Tax Payable Income tax payable is shown as a current liability because the debt will be resolved within the next year. However, any portion of income tax payable not scheduled for payment within the next 12 months is classified as a long-term liability.

Is sales tax due when billed or collected?

Payment of sales tax is on an accrual basis and not on a cash basis. Sales tax must be reported and paid with the return for the period in which the sale occurs.

What is sales tax collected from customers?

Sales tax collected is the amount of tax you collect from customers during the sale. Sales tax is typically a percentage of the sale, which ranges from 2.9 percent to 7 percent, depending on the state in which you conduct business. Some counties and localities also impose sales tax.

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What account is collected sales tax held in Quickbooks?

When you charge your customers sales tax, it posts to the Sales Tax Liability account (as a credit) in your chart of accounts. When you pay the collected tax to your state revenue department, you would post that payment to the same Sales Tax Liability account (as a debit) to reduce your liability.

How do you record tax expense?

Companies record income tax expense as a debit and income tax payable as a credit in journal entries. If companies use the same cash method of accounting for both financial and tax reporting, the completed journal entries include an equal debit and credit to income tax expense and income tax payable, respectively.

When sales tax is charged to a customer the amount is credited to?

When a customer is billed for sales taxes, the journal entry is a debit to the accounts receivable asset asset for the entire amount of the invoice, a credit to the sales account for that portion of the invoice attributable to goods or services billed, and a credit to the sales tax liability account for the amount of

What is a sales journal in accounting?

A sales journal is a subsidiary ledger used to store detailed sales transactions. When a transaction is recorded, the accounts receivable account is debited, while the sales account is credited. The sales journal only stores receivables; this means that sales made in cash are not recorded in it.

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