Pocahontas School District, an Independent Public School District, Financed the Acquisition

question 26

Multiple Choice

Pocahontas School District, an independent public school district, financed the acquisition of a new school bus by signing a note for $90,000 plus interest on the unpaid balance at 6%.Annual principal payment of $30,000, plus interest, are due each July 1.Assuming that the District maintains its books and records in a manner that facilitates the preparation of the fund financial statements, the appropriate entry in the General Fund at the date of acquisition is

• A)Debit Expenditures $90,000; Credit Notes Payable $90,000.
• B)Debit Fixed Assets $90,000; Credit Notes Payable $90,000.
• C)Debit Expenditures $90,000; Credit Other Financing Sources $90,000.
• D)Debit Fixed Assets $90,000; Credit Other Financing Sources $90,000.

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Definitions:

Equilibrium

A state of balance in a market system where supply equals demand, and there is no tendency for change.

Economic Profits

The difference between total revenues and total costs, including both explicit and implicit costs, reflecting the excess return over the firm's opportunity costs.

Demand Curve

A graph showing how the quantity demanded of a good or service varies with its price.

Elastic

A characteristic of a good or service where its demand or supply changes significantly when its price changes.