Asked by Adecel Rusty on Jul 17, 2024
Verified
Sales taxes that are collected from selling a product or service are recorded as
A) revenue.
B) an expense.
C) an asset.
D) a liability.
Sales Taxes
Taxes imposed by governments on the sale of goods and services, collected by retailers and passed on to tax authorities.
Product Service
A term typically referring to the offering or provision of products and services by a business.
- Recognize the treatment of sales taxes in financial records.
Verified Answer
GG
Geetha GanesanJul 21, 2024
Final Answer :
D
Explanation :
Sales taxes collected from customers are not revenue for the company; instead, they are collected on behalf of the government. Therefore, they are recorded as a liability until they are remitted to the government.
Learning Objectives
- Recognize the treatment of sales taxes in financial records.