Assume That an Internal Service Fund Purchases Land on Which

question 5

Multiple Choice

Assume that an Internal Service Fund purchases land on which to construct a new warehousing facility. The fund paid cash for 30% of the purchase price and financed the reminder with a loan from a local lending institution. The Internal Service Fund will

• A) Increase Net Investment in Capital Assets.
• B) Report capital outlay expenditures.
• C) Depreciate the cost of the land over its useful life.
• D) Record the land in the General Capital Assets accounts.

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Definitions:

Marginal Utility

The change in total satisfaction or utility that a person receives from consuming one additional unit of a good or service.

Budget Line

Represents all the combinations of two goods that a consumer can afford given their prices and the consumer's income.

Indifference Curve

A graphical representation showing combinations of goods or services among which a consumer is indifferent, reflecting their preferences.

Money Income

The total amount of monetary earnings received by an individual or household, including wages, salaries, and other income sources.