In this lesson, Nick Palazzolo, CPA, demystifies the handling of sales taxes and income taxes payable, common liabilities that businesses collect on behalf of the government. He uses the relatable example of purchasing a breakfast sandwich to illustrate how sales taxes might be included in the total price or calculated separately. Nick simplifies the concept by clarifying when and how businesses may recognize these taxes during the point of sale. He also briefly touches upon income taxes payable, noting their relevance to governmental agencies and the different applications to various business structures like partnerships or sole proprietorships. With a hint of wry humor about the anticipation of tax discussions, Nick promises a more in-depth exploration in a subsequent section.
Lesson: Sales Taxes and Income Taxes Payable
In this lesson, Nick Palazzolo, CPA, demystifies the handling of sales taxes and income taxes payable, common liabilities that businesses collect on behalf of the government. He uses the relatable example of purchasing a breakfast sandwich to illustrate how sales taxes might be included in the total price or calculated separately. Nick simplifies the concept by clarifying when and how businesses may recognize these taxes during the point of sale. He also briefly touches upon income taxes payable, noting their relevance to governmental agencies and the different applications to various business structures like partnerships or sole proprietorships. With a hint of wry humor about the anticipation of tax discussions, Nick promises a more in-depth exploration in a subsequent section.
Updated: Oct. 20, 2021 Create an account