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 credited to accounts payable?

Question

Quizplus · Accepted Answer

The accounts payable will include both the cost of the item and the PST. The PST is 7% of $4,000, which is $280. Therefore, the total amount credited to accounts payable is $4,000 + $280 = $4,480.

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