Which of the following would increase the governmental activities balance in Net Position-Net Investment in Capital Assets?
A) Use of tax revenues to acquire a police department building.
B) Issuance of long-term debt to be used to acquire equipment for the police department.
C) A gift of land to the city restricted by the donor to be used by the city airport, which is accounted for as an enterprise fund.
D) Recording annual depreciation on capital assets.

Question

Quizplus · Accepted Answer

The use of tax revenues to acquire a police department building would increase the governmental activities balance in Net Position-Net Investment in Capital Assets because it represents a capital expenditure that is accounted for in the government-wide financial statements as a governmental activity.

Which of the Following Would Increase the Governmental Activities Balance