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%
-Which of the following is included in equity?
A) current assets
B) revenue
C) deferred revenue
D) retained earnings

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%
-Which of the following is included in equity?
A) current assets
B) revenue
C) deferred revenue
D) retained earnings

Quizplus · Accepted Answer

Retained earnings are included in equity as they represent the portion of a business's profits that have been kept or retained in the business rather than paid out to shareholders as dividends. This increases the equity of the company.

Cost of the Asset$100,000