Question

Which of the following statements is true?

A : The amount of sales tax collected by a retail store when making sales is a current liability.
B : The amount of sales tax collected by a retail store when making sales is recorded as an operating expense.
C : Sales taxes collected by a retail store are miscellaneous revenue for the store.
D : Sales taxes collected by a retail store when making sales is not recorded because it is a tax paid by the customer.

Answer 1

The correct statement is: The amount of sales tax collected by a retail store when making sales is a current liability.

Step-by-step explanation:

The correct statement is: A : The amount of sales tax collected by a retail store when making sales is a current liability. Sales tax collected by a retail store is considered a current liability because the store collects the tax on behalf of the government and is responsible for remitting it to the appropriate tax authority.