Depreciation expense on assets of the public safety function totaled $195,000 for the year. What is the effect on the operating statement conversion worksheet in the two-worksheet approach of this event?

Question

Quizplus · Accepted Answer

Depreciation expense on assets of the public safety function is a direct expenditure and will increase the public safety expenditure/expenses by $195,000. The impact of depreciation is not reflected in the General Capital Assets accounts until the Comprehensive Annual Financial Report is prepared at the end of the year. Therefore, option A is incorrect. Option C is incorrect as unallocated depreciation would be accounted for in the General Capital Assets account. Option D is incorrect as program revenues are generated by the public safety function and depreciation expense does not affect them.

Depreciation Expense on Assets of the Public Safety Function Totaled