In which of the following is purchase of fixed assets on credit first recorders?
Answer Details
Purchase of fixed assets on credit is a transaction that involves the purchase of a long-term asset using credit from a supplier. This transaction is recorded in the journal proper as it is a non-routine transaction and does not fit into the other specialized journals such as the purchases journal, sales journal, or cash book.
The journal proper is a general journal used to record any transactions that do not fit into the specialized journals. It is used for non-routine transactions such as the purchase of fixed assets on credit, adjusting entries, and closing entries. These transactions are recorded in the journal proper and then posted to the relevant accounts in the general ledger.
The purchases journal is used to record purchases of inventory or stock on credit, while the cash book is used to record cash transactions. Fixed assets are not considered inventory or stock, and their purchase on credit is not a cash transaction. Therefore, the purchase of fixed assets on credit is not recorded in the purchases journal or cash book.
Finally, the general ledger is a record of all the accounts used by a business, including assets, liabilities, equity, revenue, and expenses. Transactions recorded in the journal proper are posted to the relevant accounts in the general ledger, including the account for fixed assets.
Therefore, the correct answer is B, the journal proper, as the purchase of fixed assets on credit is first recorded in this general journal.