Chapter 5, Problem 17.5EP

Machinery and equipment depreciation expense for general capital assets totaled $163,000 for the reporting period. Which of the following correctly defines the recording of depreciation for general capital assets?

1. a.      Depreciation expenditures should be debited and accumulated depreciation should be credited.
2. b.      Depreciation expenses should be debited and machinery and equipment should be credited.
3. c.       Depreciation expense is allocated and recorded at the government-wide level with a debit to the functions or programs of government and a credit to accumulated depreciation.
4. d.      Because depreciation does not involve the use of financial resources, it is not necessary for the government to record it at the fund level or government-wide level.