A Local Government Purchased a Building and Recorded the Event

question 110

Multiple Choice

A local government purchased a building and recorded the event by debiting Expenditures - Capital Outlay and crediting Cash. What would be the worksheet entry to prepare the government-wide statements in the year of acquisition) ?

• A) Debit to Capital Assets and credit to Cash
• B) Debit to Capital Assets and credit to Accumulated Depreciation-Capital Assets and Expenditures - Capital Outlay
• C) Debit to Capital Assets and credit to Net Position
• D) Debit to Capital Assets and credit to Expenditures - Capital Outlay

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Definitions:

Depreciation

The process of spreading the costs of long-lived assets such as buildings and equipment over the total number of accounting periods in which they are expected to be used.