 in practice you would want to use the little widget down here if you're using the whole sales tax setup which should work nicely if you were running the practice problem in real time but we're going to actually generate a check to record the transaction in our practice problem. So let's go up top I'll just hit the plus button and I might make two checks to tie out to our practice problem bank reconciliation because oftentimes when you pay sales tax it'll be like a state tax and then the city tax that you might have to pay so I'm going to break that out because that's how our bank reconciliation is city tax I'm just going to say California I'm just making up the the the vendor here to make it somewhat generic that we are paying the sales tax this being you know the government that we're paying whoever's whoever's saying hey you got to give us protection money this is how much you owe so then down below I'm just going to say this is going to go to that category the sales tax category which was the California department of tax and fees and I'm going to make one payment for the 1875.09 where did I come up with that number I came up with that number because I'm trying to tie out to my practice problem on the bank rec so the sum of the two transactions that I make will tie out to our liability form that we generated over here which is which is not pulling up but I'll go back to there in a second and so there we have it okay I fixed it now so there it is so that's that and so now let's say save and new because I'm going to make another check save and new and I'm going to be I'm going to say this is now the state so I'm going to say this is going to the state uh sales tax California I'm just making up a vendor here that we're going to pay uh there so that's that boom bam shaka laka and so the check number populates and this is going to go once again to the california bor calif california department and so on and whatever so then I'm going to say this one is for 468.77 and I think the two of those checks should add up to this 234385 which we'll check out in a second so let's save and close that and see if that does indeed do what we expect so if I go back to the tab to the right and I go into my balance sheet and we run it then I can see the checking account should go down by those two checks clearly that should be something that happens so if I go down I've got all this stuff happening on the 28th so it's kind of hard to see but the ones that I just made were here and the other one was there so those two are in there that looks good now note they're in there as normal checks if I use the check the widget thing to make them if I could do that then it would show up kind of like a special check kind of like a bill payment check or a payroll check right it'll give you that that extra little special uh thing that tells you tells you that which would be good you want to use that if you're using the whole system within quickbooks but we can't do it real time as we explained so I won't go into it in any detail here so then if I look at the california department of sub blah blah and I go into that then we can see once again that at the end of january the end of january we had the amount that we owed of two three four three 85 and then we paid these two checks at the end of february and if I pull up the trustee calculator to calculate those two checks then it'll be four six eight point seven seven plus one eight seven five point oh nine and there's that two three two three four three eighty six that's paid off so this amount the five five three sixty nine is what is uh is what is still do and and we're gonna have to pay that's what we collected in february that we're gonna have to pay at the end of march is the way we're setting up our system here in the practice problem so if I go to the tab to the right notice that that the payment that we made ties out here to the liability and if I if I run this report for march oh two oh one two three two oh two twenty eight two three run it then we've got the five five three seventy that's what's going to be due uh in march so so this is what we collected in february that's going to be due in march now note another thing that people often get confused it's confusing until you understand it you're gonna say well hey I paid I paid these taxes they should be an expense on my income statement that's I was a lot of money I should be able to deduct it on my income statement why isn't it here we explained it before but it's still a little bit confusing and it's because neither the income when you collected the sales tax nor the expense when you pay the sales tax is on the income statement you can imagine a system where they did that where you've recorded the income and then the expense of doing business but then the implication would be that the expense was your expense it's a business expense but it's not in theory a business expense you're just the tool of the government you're just the collector it's not your income it's not your expense when we collect it we're supposed to put it on the balance sheet because in theory it's a tax applied directly to the client you know or the customer right not to you you're just the middle you're just a collection person therefore the accounts payable goes up with the sales receipt or the invoice and then it goes down when you make the payment neither income or expense hits the income statement so that's the uh that's the general idea