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

question 31

Multiple Choice

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?

• A)$4,000
• B)$4,480
• C)$4,280
• D)$4,200
• E)None of these answers is correct.

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Definitions:

Process Controls

Mechanisms and techniques used to manipulate and maintain the operation of processes to achieve desired outputs consistently.

Divisional Departmentation

Groups individuals and resources by products, territories, services, clients, or legal entities.

External Threats

Potential dangers originating from outside an organization that can cause damage or disruption.

Partnership

A business structure in which two or more individuals manage and operate a business in accordance with the terms and objectives set out in a partnership agreement.