How should a lease for a general capital asset be recorded in the General Fund accounts at the inception of the lease?

Question

Quizplus · Accepted Answer

CIn governmental accounting, when a general capital asset is acquired through a lease in the General Fund, it is typically recorded as a capital expenditure (B) because the General Fund uses the modified accrual basis of accounting, which does not recognize long-lived assets. The obligation to pay future lease payments is recorded as a liability, hence a credit to Lease Obligations Payable (C).

How Should a Lease for a General Capital Asset Be