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Answer the following questions related to sales tax transactions in merchandising companies: a. at the time of the sales transaction when a customer buys the product, who is paying the sales tax? The company or the customer? b. Is the amount of the sales tax ever included in the Sales Revenue account? Why or why not? c. at the time of the transaction when the company remits the sales tax to the state, is the company incurring an expense on the income statement? Why or why not?

Answer the following questions related to sales tax transactions in merchandising companies: a. at the time of the sales transaction when a customer buys the product, who is paying the sales tax? The company or the customer? b. Is the amount of the sales tax ever included in the Sales Revenue account? Why or why not? c. at the time of the transaction when the company remits the sales tax to the state, is the company incurring an expense on the income statement? Why or why not?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Answer the following questions related to sales tax transactions in merchandising companies: a. at the time of the sales transaction when a customer buys the product, who is paying the sales tax? The company or the customer? b. Is the amount of the sales tax ever included in the Sales Revenue account? Why or why not? c. at the time of the transaction when the company remits the sales tax to the state, is the company incurring an expense on the income statement? Why or why not?
Transcribed Image Text:Answer the following questions related to sales tax transactions in merchandising companies: a. at the time of the sales transaction when a customer buys the product, who is paying the sales tax? The company or the customer? b. Is the amount of the sales tax ever included in the Sales Revenue account? Why or why not? c. at the time of the transaction when the company remits the sales tax to the state, is the company incurring an expense on the income statement? Why or why not?
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