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Level 1

Sales tax expense

Hi I am preparing a tax return for a client that uses a POS system in their franchise. When a sale is made the entry is 

dr checking 200.00

cr sales tax payable 200.00


The client then makes an entry for a bill

dr sales tax payable 

cr accounts payable


The bill is paid

dr accounts payable

cr checking


Where does the entry for sales tax expense come in?


Thanks to anyone that can help with this. 




2 Comments 2
Level 15

Sales tax expense

A company collects, holds, and pays the sales tax for the state. It is Not an expense at all.



Level 1

Sales tax expense

Well thank you very much. I'll take this as another reminder that I tend to overthink things! 



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