Which of the Following Describes How a Governmental Fund (E

question 7

Multiple Choice

Which of the following describes how a governmental fund (e.g.general fund) accounts for a capital lease?

• A)As a noncurrent liability
• B)In a manner similar to how the fund accounts for bonds.
• C)As an asset and a lease liability
• D)None of the choices identifies the appropriate way to account for a capital lease.

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Definitions:

Price Level

The total average price level for all domestically produced goods and services.

Base Year

A specific year against which economic growth is measured, serving as a standard of comparison for other years.

National Income

National Income is the total income earned by the residents of a country, including wages, profits, rents, and taxes, minus subsidies, over a certain period of time, often used to assess the economic health of a country.

Wages

Compensation provided to workers for their efforts or tasks, usually determined based on hours worked, daily rates, or the amount of work completed.