Capital assets used by an enterprise fund should be accounted for in the
A) Enterprise fund and depreciation on the capital assets should be recorded.
B) Business-type activities journal but no depreciation on the capital assets should be recorded.
C) Governmental activities journal and depreciation on the capital assets should be recorded.
D) Enterprise fund but no depreciation on the capital assets should be recorded.

Question

Quizplus · Accepted Answer

Capital assets used by an enterprise fund should be accounted for in the enterprise fund and depreciation on the capital assets should be recorded. This is because an enterprise fund is a self-supporting entity, and as such, it needs to account for all assets and liabilities, including capital assets. Depreciation on the capital assets should be recorded to reflect the wear and tear on these assets over time.

Capital Assets Used by an Enterprise Fund Should Be Accounted