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11 lip 2024 · Once the sales taxes are remitted, you’ll debit the Sales Tax Payable account and credit Cash. If a business buys any items from its vendors and pays a sales tax on these items, it charges the sales tax to expense in the current period, along with the cost of the items purchased.
Sales Tax account is debited since this is the amount of sales tax recoverable from the tax authorities. Where the initial purchase was made on credit, subsequent payment of dues to the supplier will result in the following double entry:
20 wrz 2022 · Debit your Cash account for the total amount the customer paid you. Then, credit your Sales Revenue account the purchase amount before sales tax. And, credit your Sales Tax Payable account the amount of the sales tax collected. Take a look at the following journal entry:
The journal entry is debiting cash and credit sale tax payable. Sale tax payable is the current liability on the balance sheet which the company has to pay to the government base on the promised date. At the end of the month, the company has the obligation to pay the collected amount to the government.
10 mar 2022 · For sales tax payable specifically, your journal entry will show the amount of sales tax you collect as a credit. You’ll also enter the product or service revenue amount on a separate line. This tax is money you owe, so you will debit your cash account to keep your books balanced.
10 wrz 2024 · Debits are always on the left side of the entry, while credits are always on the right side, and your debits and credits should always equal each other in order for your accounts to remain in...
Is Accounts Payable a Debit or a Credit? The question above does confuse some due to the terminology used in accounting. For example, accounts payable are considered a debt of a company because they involve the purchase of goods on credit.
