Indicate Whether Each of the Following Statements About Sales Tax

question 112

Short Answer

Indicate whether each of the following statements about sales tax is true or false:
1. Remitting to the state the amount of sales tax collected on sales is a claims exchange transaction
2. Collecting sales tax from a customer is an asset source transaction
3. If a company records a $100 sale that is subject to a sale tax rate of 6%, it should record Sales Revenue in the amount of $94
4. The amount a company owes to the state for sales tax it has collected is a current liability
5. When a company records sales tax it has collected from a customer, it records Sales Tax Expense and Sales Tax Payable

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Definitions:

Task Time

The duration or period required to complete a specific job, activity, or assignment.

Clock Time

relates to the measurement of time using instruments or devices, typically standardized hours, minutes, and seconds, as opposed to subjective or natural measurements of time.

Time Currency

A concept where units of time are used as currency, often in systems of barter or trade for services where traditional money is not used.

Technological Control

The use of technology to monitor and control the production and distribution of products and services.