Sales tax collections and dispersal

[David Carlson]

On 11/3/2014 8:33 PM, Fast Radio wrote:
> This seems wrong to me.
>
> I used the method similar to the out outlined in the book
>
>
>
>
>       On Sunday, November 2, 2014 8:02 PM, John Ralls <jralls at ceridwen.us> wrote:
>    
>
>  
>> On Nov 2, 2014, at 7:04 PM, Allen Cogbill <acogbill at geopotential.com> wrote:
>>
>> I have what should be a simple problem, but I don't quite understand how to set up the transfer accounts properly. When I make a sale and collect sales tax, the funds are credited as follows:
>>
>> 1. Sale Amount credited to Checking (asset)
>> 2. Sales tax collected credited to Checking (asset)
>> 3. Sale Amount credited to "Sales" (an income account)
>> 4. Sales tax amount credited to "Sales tax" (liability)
>>
>> Later, when I actually pay the sales tax, I want to
>>
>> 1. Debit Sales tax amount from checking account, because the tax is paid from the checking acct
>> 2. Debit "Sales Tax" liability Account
>> 3. Credit "Sales Tax" expense account
>>
>> The problem is that the second operation does not balance. I don't want to expense the sales tax when it is collected, for it is actually paid at a later date.
> Sales tax that you collect on behalf of the State isn't an expense to you. It's the State's money, paid by the buyer, which you're holding onto for a little while.
>
> Regards,
> John Ralls
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Fast Radio,
Google put this in my spam folder, but I must ask - which book and what
method.?

David C