To Which Account Should the Amount of Sales Tax Paid

question 86

Multiple Choice

To which account should the amount of sales tax paid on the purchase of new machinery should be debited?

• A)A sales tax expense account.
• B)A separate deferred charge account.
• C)The machinery account.
• D)Accumulated depreciation for machinery.

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Definitions:

Important

A characteristic denoting something of great significance or value in a specific context or situation.

ABC Analysis

A method of categorizing inventory into three classes, with 'A' items being of high value, 'B' items of moderate value, and 'C' items of lower value, to prioritize inventory management efforts.

Pareto's Law

Also known as the 80/20 rule, it states that for many events, roughly 80% of the effects come from 20% of the causes, applicable in various contexts including economics and business.

Batching Economies

Cost advantages gained by producing or purchasing goods in large quantities at once.