Proceeds of debt issued for the construction or acquisition of capital assets are recognized by the capital projects fund as "ot

Question

White raven [17]

3 years ago

13

Proceeds of debt issued for the construction or acquisition of capital assets are recognized by the capital projects fund as "ot

her financing sources" and as a liability in the governmental activities journal.A. TRUEB. FALSE

Business

1 answer:

Genrish500 [490] · Answer 1 · 2022-03-20T18:40:09+03:00

Answer:

The correct answer is letter "A": True.

Explanation:

In governmental accounting, capital project fund is used to record the resources necessary for major capital assets which are those expected to generate value over the long-run such as buildings, machinery, and vehicles. Current liabilities derived from the capital assets are recognized by capital fund but long-term liabilities are recorded in the governmental activities journal.