Which of the Following Would Increase the Balance in Net

question 23

Multiple Choice

Which of the following would increase the balance in net assets-invested in capital assets,net of related debt?

• 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:

Declared

Refers to a dividend or other corporate action that has been formally announced by a company's board of directors.

Payment of Dividends

This refers to the distribution of a portion of a company's earnings to its shareholders.

Depreciation Expense

The systematic allocation of the cost of a tangible asset over its useful life, recognizing the asset's wear and tear, deterioration, or obsolescence.

Indirect Method

A way of calculating cash flows in the statement of cash flows where net income is adjusted for non-cash transactions and changes in working capital.