A Local School District Issued a Short-Term Note Payable to Purchase

question 52

Multiple Choice

A local school district issued a short-term note payable to purchase $500,000 of recreation equipment. The note will be repaid with General Fund resources. The General Fund would record

• A) Debit Expenditures - Capital Outlay and credit Due to Bank, for $500,000.
• B) Debit Capital Assets and credit Notes Payable, for $500,000.
• C) Debit Capital Assets and credit Revenues, for $500,000.
• D) Debit Expenditures - Capital Outlay and credit Note Payable, for $500,000.

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Definitions:

Dividends

Payments made by a corporation to its shareholder members, typically from profits.

Common Stock

A type of ownership in a corporation that comes with voting rights, and typically receives dividends, reflecting a share in the company's profits.

Dividends

Payments made by a corporation to its shareholder members, reflecting the earnings the company has made and decided to distribute.

Constant Growth DDM

A dividend discount model that assumes dividends will continue to increase at a constant growth rate indefinitely, used to evaluate the price of a stock.