If a Governmental Fund Issues Debt to Finance a Capital

question 41

Multiple Choice

If a governmental fund issues debt to finance a capital acquisition, how should the proceeds of the debt be recorded?

• A) Long-term liability.
• B) Revenue.
• C) Other financing source.
• D) Not reported by the governmental fund; only reported at the government-wide level.

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Definitions:

Groupthink

The tendency of group members to think alike, especially when doing so leads to bad decisions.

Commons Dilemma

A situation in which individuals or groups must balance personal interests with the collective good in the management and consumption of shared resources, often leading to conflicts over resource distribution.

Obedience

The act of following orders or instructions from an authority figure, even if it goes against one's personal beliefs or desires.

Brainstorm

The process of generating creative ideas and solutions through intensive and freewheeling group discussion.