The agreed cost of an item to be purchased by a business on credit is $4,000and 7% provincial sales tax (PST). When this transaction isrecorded, what amount will be debited to advertising expense?

Question

Quizplus · Accepted Answer

The advertising expense account is not affected by the PST, so we only need to consider the cost of the item itself. The amount to be debited to advertising expense is therefore $4,000.

The Agreed Cost of an Item to Be Purchased by a Business