Equipment acquired under a lease for use by an internal service fund will be reported as a capital asset in both the fund and government-wide financial statements.

Question

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Equipment acquired under a lease for use by an internal service fund will be considered as a capital asset according to generally accepted accounting principles (GAAP). Therefore, it will be reported as a capital asset in both the internal service fund and government-wide financial statements.

Equipment Acquired Under a Lease for Use by an Internal