The South City Golf Course purchased a new golf cart for $18,000 in cash at the beginning of the fiscal year. South City accounts for the golf course using an enterprise fund. It plans on using straightline depreciation for its capital assets. South City expects the cart to last 6 years and to then have no salvage value.
1. Select the most correct answer: At the time of the cart purchase, the accountant for South City Golf Course will
a. decrease cash by $18,000 and increase expenses by $18,000.
b. decrease cash by $18,000 and increase equipment assets by $18,000.
c. increase equipment assets by $18,000 and increase net assets by $18,000.
d. not record this transaction, because governments do not record long-term assets.
2. Select the most correct answer: At the end of the fiscal year, the accountant for South City Golf Course will
a. increase accumulated depreciation by $3,000 and increase expenditures by $3,000.
b. increase accumulated depreciation by $3,000 and increase expenses by $3,000.
c. increase accumulated depreciation by $18,000 and increase expenses by $18,000.
d. not be required to record journal entries at this time.