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.

Question

Quizplus · Accepted Answer

The amount of sales tax paid on the purchase of new machinery should be debited to the machinery account, as it is a part of the cost of acquiring the machinery. This would increase the recorded cost of the asset and depreciation expense would be recorded on this increased cost.

To Which Account Should the Amount of Sales Tax Paid