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

Multiple Choice

The agreed cost of an item to be purchased by a business on credit is $4,000. The applicable cost will be debited to advertising expense. The item is subject to 5% goods and services tax (GST) and 7% provincial sales tax (PST) . When this transaction is recorded, what amount will be recorded as GST Receivable?

A) $200 debit
B) $200 credit
C) $240 debit
D) $240 credit
E) None of these answers is correct.