Accounting: Tools for Business Decision Making, 5th Edition

Published by Wiley
ISBN 10: 1118128168
ISBN 13: 978-1-11812-816-9

Chapter 10 - Reporting and Analyzing Liabilities - Questions: 3

Answer

Step1: · Seller treat it as a current liability and record it in sales tax payable account. · Buyer pays the amount as part of purchase and record as purchase cost. Step2: Cash 8,550 dollars Sales 8,000 dollars Sales tax payable 550

Work Step by Step

Step1: The sales tax is not an expense in the income statement. It is a part on sales and is treated as follows Step2: To record daily sales and sales tax
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