Question

Which of the following capital asset-related transactions would most likely be accounted for through a Capital Projects Fund? A major general government capital lease transaction Purchase of multiple computers for general government departments Construction of a general government office building Maintenance of general government fixed assets

Answer 1

Answer:

The correct answer is C. Construction of a general government office building.

Explanation:

A capital project refers to investments made in order to generate future profits on sale or rent and which are shared among several project investors. The construction of an office building would be classified within this group, since the utility will be given from the lease of the construction for the execution of activities typical of the general government. Within the investment structure, the usufruct of the real property is conceived in order to recover the investments made within a period of time. These projects generally involve banks and entities with a high level of capital that create trust funds that separately manage the accounts of these associations.