Author Question: The General Fund transfers 500,000 to a Printing Internal Service Fund, which the Internal Service ... (Read 109 times)

AEWBW · **on:** Jul 5, 2018

The General Fund transfers 500,000 to a Printing Internal Service Fund, which the Internal Service Fund uses to acquire machinery. How should the Internal Service Fund account for the cost of acquiring and using the equipment?

a. record the acquisition cost as an expenditure and ignore any depreciation
b. record the acquisition cost as an asset and depreciate it over its estimated useful life
c. record the acquisition cost as an asset, credit investment in capital assets, do not depreciate the asset, and write off the entire asset when it is disposed of
d. record the acquisition cost as an expenditure of the General Fund

Question 2

The customers ledger and the creditors ledger refer to subsidiary ledgers.
a. True
b. False

Indicate whether the statement is true or false