A retailer sells goods for $1,000 on account and collects 8% sales tax from the customer. By how much does the Sales account increase as a result of this transaction?

1. Sales tax collected is the customer's money owed to the tax agency, not the seller's revenue. 2. The Sales account is credited only for the selling price of the goods: $1,000. 3. The 8% tax of \$80 is credited to Sales Tax Payable, a separate liability, not to Sales. 4. Therefore Sales increases by $1,000. _Source: Jonick, Principles of Financial Accounting (CC BY-SA 4.0), §5.1 "Sales Tax", p.209_