What Would Be the Effect on the General Fund's Fund

question 22

Multiple Choice

What would be the effect on the General Fund's Fund Balance at the end of the current fiscal year of recording the purchase of a $15,000 new computer with a five year estimated useful life and zero salvage?

• A) Reduce the General Fund's Fund Balance $ 3,000.
• B) Reduce the General Fund's Fund Balance $15,000.
• C) Reduce the General Fund's Fund Balance $18,000.
• D) Have no effect on the General Fund's Fund Balance.

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Definitions:

Inventory

The total amount of goods and materials held in stock by a business, intended for sale or production.

Partnerships

A business organization in which two or more individuals own and operate the business together, sharing in profits and liabilities.

Corporations

Legal entities that are separate from their owners, with the ability to own property, incur liabilities, and sell stock.

Corporation

A business firm that is a legal person. Its chief advantage is that each owner’s liability is limited to the amount of money he or she invested in the company.