Question

Depreciation on capital assets used by an enterprise fund of a government should be recorded in the __________ fund by a debit to an ________ account.

Answer 1

Depreciation for assets in an enterprise fund is recorded in the Enterprise Fund with a debit to an expense account, showing the asset's decline in value over time.

Step-by-step explanation:

Depreciation on capital assets used by an enterprise fund of a government should be recorded in the Enterprise Fund itself by a debit to an expense account. This reflects the usage and wear of the assets over time.

In the accounting records of the enterprise fund, a debit to Depreciation Expense and a corresponding credit to Accumulated Depreciation on the balance sheet is made to acknowledge this decline in value.