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Test: CPA Financial Accounting and Reporting (FAR)
1. | The library of the city of Howerton has ordered new shelving units at the cost of $40,000. How is this order recorded by the city in the government-wide financial statements? |
As an encumbrance in the business-type activities
Financial commitments are not formally reported on the government-wide financial statements
As an encumbrance in the governmental activities
As temporarily restricted net assets in the governmental activities
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