General Capital Assets Are Not Reported in Governmental Funds Because

question 9

Multiple Choice

General capital assets are not reported in governmental funds because

• A) The measurement focus of governmental funds is on current financial resources.
• B) They are not used to used generate revenues.
• C) The basis of accounting is accrual.
• D) All of the above.

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Definitions:

Profitability Index

A financial tool used to measure the relative profitability of an investment, calculated as the present value of future cash flows divided by the initial investment cost.

Cash Inflows

Cash inflows are the money received by a business from its various activities, such as sales revenues, financing, and investments.

Investment Projects

Initiatives undertaken by businesses to invest in assets or activities with the expectation of generating future benefits or returns.

Internal Rate Of Return

A financial metric used to evaluate the profitability of potential investments, calculated as the discount rate that makes the net present value of all cash flows from the investment equal to zero.