How Should a Lease for a General Capital Asset Be

question 64

Multiple Choice

How should a lease for a general capital asset be recorded in the General Fund accounts at the inception of the lease?

• A) Debit to a lease asset account.
• B) Debit to a capital expenditure account.
• C) Credit to Lease Obligations Payable.
• D) Both Debit to a lease asset account and Credit to Lease Obligations Payable are correct.

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Definitions:

Net Income

The profit of a company after all expenses and taxes have been deducted from total revenue.