Joshua County Bought a New Backhoe Using General Fund Cash

question 64

Multiple Choice

Joshua County bought a new backhoe using general fund cash. When the asset was acquired, what was the appropriate entry in the general fund, assuming that the entity maintains its books and records in a manner to facilitate the preparation of fund financial statements?

• A) Debit Equipment; Credit Cash.
• B) Debit Equipment; Credit Investment in capital assets.
• C) Debit Expenditures; Credit Cash.
• D) Debit Expenditures; Credit Investment in capital assets.

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Definitions:

Legally Binding

A contract or agreement that is enforceable by law, obligating parties to fulfill their commitments.

Bilateral Contract

A type of contract that arises when a promise is given in exchange for a promise.

Payment of Funds

The act of transferring money from one party to another as a form of compensation or fulfillment of an obligation.

Moral Obligations

Duties that arise from ethical principles rather than legal requirements.