The Amount of Sales Tax Collected by a Retail Store

question 107

Multiple Choice

The amount of sales tax collected by a retail store when making sales is

• A) a miscellaneous revenue for the store.
• B) a current liability.
• C) not recorded because it is a tax paid by the customer.
• D) recorded as an operating expense.

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Definitions:

Total Direct Materials Cost Variance

The difference between the actual cost of direct materials used in production and the standard cost of those materials.

Fixed Overhead Cost

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance.

Volume Variance

A measure used in budgeting and accounting to show the difference between expected (budgeted) and actual sales volumes, affecting revenue or costs.

Direct Labor Time Variance

The difference between the estimated time to complete a task and the actual time taken, affecting cost management in manufacturing.