When a Capital Lease Is Used to Lease Fixed Assets

question 39

Multiple Choice

When a capital lease is used to lease fixed assets for the general government,the governmental fund acquiring the fixed assets debits ________ at the ________.

• A)expenditures; future value of the lease payments
• B)fixed assets; future value of the lease payments
• C)expenditures; present value of the lease payments
• D)fixed assets; present value of the lease payments

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Definitions:

Government Spending

Expenditures made by the government for the purpose of economic activity, including salaries of public servants, public projects, and social services.

Recession

A marked reduction in economic performance widespread throughout the economy, persisting for more than a few months, often seen in real GDP, real income, employment, industrial production, and wholesale-retail sales.

Expected Profit Rate

The forecasted return or profit expressed as a percentage that a business or investment is projected to earn over a specific period.

Interest Rate

The percentage of an amount of money charged for its use, indicating the cost of borrowing money or the return on invested savings.