How Should a Capital Lease for a General Capital Asset

question 71

Multiple Choice

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

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

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Definitions:

Independent Contractors

Individuals who provide goods or services under terms specified in a contract or within a verbal agreement, not considered employees.

Agents

Individuals or entities authorized to act on behalf of another person or entity in business transactions or legal matters.

Commodities Market

A marketplace where traders buy and sell raw physical products such as gold, oil, or agricultural products.

Ownership

The legal right or status of having control over property, resources, or assets.