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:

Real GDP

An inflation-adjusted measure that reflects the value of all goods and services produced by an economy in a given year.

Nominal GDP

The gross domestic product measured at current market prices, without adjustment for inflation.

GDP Deflator

An index that measures the change in prices of all new, domestically produced, final goods and services in an economy over a period of time.

Inflation Rate

The magnitude of price escalation for goods and services across the board, causing a drop in consumer purchasing prowess.