Author Question: Liabilities that will be due within one year or less and that are to be paid out of current assets ... (Read 39 times)

fbq8i · **on:** Jul 5, 2018

Liabilities that will be due within one year or less and that are to be paid out of current assets are called current liabilities.
a. True
b. False

Indicate whether the statement is true or false

Question 2

A Motor Pool Internal Service Fund purchased ten new vehicles for their fleet inventory. The fund entered into a capital lease. The capitalizable cost totaled 300,000 and there was a 50,000 down payment.

The entry to record the transaction in the Internal Service Fund would be

Debit Credit
A. Vehicles
Expenditures
Other Financing Source Capital Lease
Cash 300,000
50,000

300,000
50,000
B. Vehicles
Other Financing Source Capital Lease
Cash 300,000
250,000
50,000
C. Vehicles
Capital Lease Payable
Cash 300,000
250,000
50,000
D. Vehicles
Expenditures
Capital Lease Payable
Cash 250,000
50,000

250,000
50,000