Works of art and historical treasures purchased by the general fund should be reported as:
A) I only.
B) II only.
C) Both I and II.
D) Neither I nor II.

Question

Works of art and historical treasures purchased by the general fund should be reported as: 
A) I only. 
B) II only. 
C) Both I and II. 
D) Neither I nor II.

Quizplus · Accepted Answer

I. Capital assets

Works of art and historical treasures are considered capital assets because they have long-term useful lives and are tangible assets held for use in operations and not held for sale in the normal course of business. Therefore, they should be reported as capital assets in the government's financial statements.

II. General Fund

The general fund is the primary operating fund of the government, used to account for and report all financial resources not accounted for and reported in another fund. Therefore, works of art and historical treasures purchased by the general fund should be reported in the general fund financial statements.

Works of Art and Historical Treasures Purchased by the General