Which of the Following Would Increase the Governmental Activities Balance

question 7

Multiple Choice

Which of the following would increase the governmental activities balance in Net Position-Net Investment in Capital Assets?

• A) Acquisition of a building to be used by the police department.
• B) Issuance of long-term debt to be used to acquire equipment for the police department.
• C) A gift of land to the city restricted by the donor to be used by the city airport, which is accounted for as an enterprise fund.
• D) Recording annual depreciation on capital assets.

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Definitions:

Factoring Commissions

Factoring commissions are fees paid to a factor, or financial intermediary, for advancing funds to a business by purchasing its accounts receivable.

Accounts Receivable

Amounts owed to a business by its customers for goods or services delivered or used but not yet paid for.

Loss

The result when a company's expenses exceed its revenues during a specific period of time.

Expense

An outflow of money or other resources, incurred to generate revenue, which is recognized in the income statement.