Question

1. How do we handle sales taxes from a retailers standpoint
2. Long term debt
3. Describe a situation about a bond (callable, convertible, Deventer bonds)
4. Interest rate when you buy a bond what does it mean(how do we state an interest rate what do we always state it in)
5. Told bonds have a face value at a certain amount but sold at a different amount (1000 bond but bought it for 980 or 1010 how do you calculate it)
6. Issuing common stock(financial state steps)
7. Dividens and rears definition
8. Selection of a financial statement of a cash dividend what do we debit and what do we credit
9. Identify the impact on retained earnings on one of three things(stock split, stock dividend, cash dividend)
10. What accounts are presented in the stockholder’s equity section on the balance sheet
11. Identifying the primary purpose of statement of cash flows
12. Identify investing, financing, or operating activity

Answer 1

Ques. How do we handle sales taxes from a retailers standpoint ?

Ans. Sales tax is indirect tax charged by government on sales of product or service. Retailer pays sales tax to wholesaler or manufacturer when he purchases goods or services from them. On sales of this goods or services, retailer collects the sales tax from ultimate consumer. So, retailer does not have to bear any tax liability on himself. Instead he collects tax from customer on final sales of goods or service to consumer. Consumer ultimately bears the tax liability of sales tax. Retailer's role is to deposit the sales tax collected from consumer to government after taking input tax credit (ITC) of sales tax paid to wholesaler or manufacturer. So, retailer pays the differential amount to government on monthly, quaterly or annual basis as may be applicable to him with respect to sales tax laws.

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