When a city enters into a capital lease for a fixed asset for the general government,

Question

Quizplus · Accepted Answer

When a city enters into a capital lease for a fixed asset for the general government, government-wide statements will report the asset and liability for the leased asset. This is because capital leases are treated as assets and liabilities on the government-wide financial statements, as they are considered long-term obligations. Therefore, Choice B and Choice D can be eliminated. Furthermore, governmental fund statements do not report long-term assets or liabilities, so Choice C can also be eliminated.

When a City Enters into a Capital Lease for a Fixed