Cost of the asset$100,000
Life of the asset 5 years
Depreciation rate20%
Capital cost allowance rate 50%
Residual value of the asset nil
Income tax rate 50%
-What are journals used for in the accounting cycle?
A) as the books of final entry
B) as the books used to record the days to day activities of a business
C) as the books of original entry
D) as the source of accounting information to prepare a trial balance

Question

Cost of the asset$100,000 
Life of the asset 5 years 
Depreciation rate20% 
Capital cost allowance rate 50% 
Residual value of the asset nil 
Income tax rate 50%
-What are journals used for in the accounting cycle?
A) as the books of final entry
B) as the books used to record the days to day activities of a business
C) as the books of original entry
D) as the source of accounting information to prepare a trial balance

Quizplus · Accepted Answer

Journals are used as the books of original entry where all financial transactions are initially recorded before being posted to the ledger accounts.

Cost of the Asset$100,000