Depreciation on capital assets is included as an expense in the Statement of Activities in the governmental fund statements.

Question

Quizplus · Accepted Answer

Governmental funds use the current financial resources measurement focus and modified accrual accounting. Under modified accrual accounting, revenues are recognized when measurable and available to finance the expenditures of the current period. Expenditures, not expenses, are recognized in the period in which the fund liability is incurred. Long-term assets are not generally recognized.

Depreciation on Capital Assets Is Included as an Expense in the Statement