"The Entire Debt Arising from the Acquisition of General Capital

question 6

Essay

"The entire debt arising from the acquisition of general capital assets under a lease agreement should be reported as debt of the fund that accounts for the activities of the department or function using the leased asset. Only debt arising from the lease of equipment used by a number of departments should be reported in the governmental activities accounts, rather than a fund." Do you agree? Why or why not?

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Definitions:

Adam Smith

Known as the father of modern economics, he was an 18th-century philosopher best known for his theories on free market economics and the invisible hand concept.

Self-Interest

What is in the best interest of and benefit to an individual.

Social Exchange

A concept describing how social stability and change occur through the process of transactions agreed upon by individuals or groups.

Calculated Involvements

Engagements or commitments that are made after careful consideration and planning to achieve specific outcomes.