Sales tax is an indirect tax charged on the sale of goods or services and collected from the customer on behalf of the government. The business does not treat this tax as its own income because it is acting as a collecting agent. Correct accounting is important so the tax portion is separated from actual sales revenue and paid over properly.
Systematic Allocation
Systematic allocation means spreading a cost over time or across units using a consistent and rational method. Depreciation and amortization are common examples of...
Suspense Account
A suspense account is a temporary account used to hold amounts when the correct accounting treatment or account head is not yet known. It...
Sunk Cost
A sunk cost is a cost that has already been incurred and cannot be recovered, regardless of future decisions. Since it cannot be changed,...
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