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At the Beginning of the Year, a Special Revenue Fund

Question 40

Multiple Choice

At the beginning of the year, a special revenue fund purchases equipment for $400,000 in cash. The equipment has a 5-year life, straight-line. The fund still holds the equipment at year-end. How is this equipment reported in the special revenue fund's operating statement for the year?


A) Expense, $80,000.
B) Expenditure, $400,000.
C) Other financing use, $400,000.
D) Not reported on the operating statement.

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