Which of the Following Transactions Should the City of Highland

question 61

Multiple Choice

Which of the following transactions should the City of Highland account for in a trust fund?

• A) General fund contributions received by the city pension plan.
• B) Greens fees received from golfers at the city-owned golf course.
• C) Grants received from the Federal government to purchase buses to be used for public transit.
• D) Proceeds of bonds issued to construct a new city hall building.

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Definitions:

Operating Lease

A lease agreement allowing a company to use an asset without ownership, often with shorter terms compared to a finance lease.

Lessor

A lessor is an entity that leases an asset to another party, known as the lessee, typically under a lease agreement.

Insurance

Insurance is a financial product that provides protection against potential future losses or damages in exchange for a premium payment.

Tax-Oriented Lease

A lease structured in such a way that the lessor can claim tax benefits, such as depreciation and tax credits.