Sales Tax Paid in Connection with the Purchase of Property

question 103

True/False

Sales tax paid in connection with the purchase of property used in a business must be treated as part of the cost of the property.

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Definitions:

Revenue Accounts

Accounts that record the income generated from the sale of goods and services, before any expenses are subtracted.

Income Summary

A temporary account used in the closing process that summarizes a company's revenues and expenses for the accounting period.

Revenue Account(s)

Accounts that track the income generated from the sale of goods or provision of services before any expenses are deducted.

J. Higgins, Withdrawals

The amount of money withdrawn by J. Higgins from a business for personal use, affecting the owner's equity.