Question

Sales Taxes Payable is credited when companies collect taxes from customers. True or False True False

Answer 1

Correct Answer: True.

Explanation: When a business collects sales tax from its customers, it increases the corresponding liability account, which is the sales tax payable account.

In order to do this, sales revenue account is credited, also in order to record received sales tax from customer,

Cash account is debited and sales revenue account and sales tax payable account are credited.

End of answer.

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