What would be the effect on the General Fund's Fund Balance at the end of the current fiscal year of recording the purchase of a $15,000 new computer with a five year estimated useful life and zero salvage?

Question

Quizplus · Accepted Answer

Recording the purchase of a new computer as an expense would decrease the General Fund's Fund Balance by the full amount of the purchase, which is $15,000 in this case. Since there is no salvage value, the entire cost would be expensed over its five-year useful life, resulting in an annual depreciation expense of $3,000. However, only the initial purchase cost would affect the Fund Balance at the end of the current fiscal year.

What Would Be the Effect on the General Fund's Fund