Use transaction analysis to determine the effects of the following transaction in an internal service fund. Determined that it is probable that a lawsuit involving a claim against a department will result in a settlement of at least $50,000. However, it is not expected that any payments will be required for two years or more. Increase current assets Decrease current assets Increase current liabilities Decrease current liabilities Increase long term assets Decrease long term assets Increase long term liabilities Decrease long term liabilities Increase fund balance Decrease fund balance Increase net position Decrease net position
Use transaction analysis to determine the effects of the following transaction in an internal service fund. Determined that it is probable that a lawsuit involving a claim against a department will result in a settlement of at least $50,000. However, it is not expected that any payments will be required for two years or more. Increase current assets Decrease current assets Increase current liabilities Decrease current liabilities Increase long term assets Decrease long term assets Increase long term liabilities Decrease long term liabilities Increase fund balance Decrease fund balance Increase net position Decrease net position
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Use transaction analysis to determine the effects of the following transaction in an internal service fund. Determined that it is probable that a lawsuit involving a claim against a department will result in a settlement of at least $50,000. However, it is not expected that any payments will be required for two years or more.
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Increase current assets |
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Decrease current assets |
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Increase current liabilities |
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Decrease current liabilities |
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Increase long term assets |
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Decrease long term assets |
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Increase long term liabilities |
||
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Decrease long term liabilities |
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Increase fund balance |
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Decrease fund balance |
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Increase net position |
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Decrease net position |
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