Profit & Loss Statement Reports

Profit and Loss Statement Report

Profit and Loss Statement Report

Should sales tax collected and paid be shown as an income/expense account on a profit & loss statement?

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Jun 06, 2018
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starstarstarstarstar 		Sales Tax Collected
by: Stephanie

Thank you for your question about how sales tax collected and paid should be shown on a financial statement.

An example of how to show sales tax accrued and collected by a paying customer is as follows:

DEBIT 110.00 Checking
CREDIT 10.00 Sales Tax Payable
CREDIT 100.00 Sales

Then when you pay the Sales Tax it would show as:

DEBIT 10.00 Sales Tax Payable
CREDIT 10.00 Checking

So, it would be shown on the Balance Sheet and would not be shown as an income/expense account on the profit and loss.

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