GST/HST paid on the purchase of inventory is
A) an additional cost that must be absorbed by the merchandise company.
B) not included in inventory because it is recoverable.
C) recorded as an operating expense on the income statement.
D) recorded as additional freight costs and included in the calculation of the cost of goods sold.

Question

Quizplus · Accepted Answer

GST/HST paid on the purchase of inventory is not included in the cost of inventory because it is recoverable through input tax credits, meaning the business can claim it back from the tax authorities.

GST/HST Paid on the Purchase of Inventory Is