Sales tax

This topic has 3 replies, 2 voices, and was last updated 10 years ago by John Moffat.

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March 20, 2016 at 4:56 pm #307157
harry1094
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Question:
“Which of following statements about sales tax is/ are true?
1. Sales tax charged on purchases is an expense to a busisness if the business is not sales tax registered.
2. Sales tax is charged by all business when they sell products.”

Please show me the reason why the statement 2 is incorrect.

I am confused about second statement, because I know will all business, the double entry when they sell the goods is:
DR AR/ CR output Sales tax + CR Sales
March 20, 2016 at 8:06 pm #307173
John Moffat
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Sales tax is only charged by businesses that are registered for sales tax.

If they are not registered (because their revenue is low) then they do not charge sales tax.
March 21, 2016 at 12:31 pm #307238
harry1094
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Thank you for your supporting, I have passed the F3 exam with 88% 2 hours ago :*
March 21, 2016 at 4:48 pm #307250
John Moffat
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That is great news. Many congratulations (especially on getting such a high mark) 🙂
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