Capital assets funded by general revenues are recorded in which statements?

• A. General Fund
• B. Governmental Activities
• C. Both General Fund and Governmental Activities
• D. Neither

Answer: (B)

Capital assets funded by general revenues are recorded in the governmental activities in the government-wide financial statements. This reflects accrual accounting for the government as a whole, showing long-lived resources it owns and uses to provide services. The General Fund, by contrast, does not capitalize assets; it records the expenditure when the asset is purchased and does not track depreciation at the fund level. In the government-wide statements, those assets are recorded at cost (net of depreciation) and depreciation is recognized over their useful lives, providing a fuller picture of the government’s resources and obligations.