Sales Tax
Remitting
Companies must regularly send (or remit) the taxes they collect to the federal government which in turn will forwards the provincial portion to the provincial government. When companies remit the taxes they collect, they are reducing these liability or contra liability accounts to zero. (Like Closing Entries)
| July 15 | HST Payable | $1400 | ||
|---|---|---|---|---|
| HST Refundable | $300 | |||
| Cash | 1100 | |||
| The cash is what you send back to the government |