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At the beginning of the year, a special revenue fund purchases equipment for $400,000 in cash. The equipment has a 5-year life, straight-line. The fund

At the beginning of the year, a special revenue fund purchases equipment for $400,000 in cash. The equipment has a 5-year life, straight-line. The fund still holds the equipment at year-end. How is this equipment reported in the special revenue fund's operating statement for the year?

Select one:

A. Expense, $80,000.

B. Expenditure, $400,000.

C. Other financing use, $400,000.

D. Not reported on the operating statement.

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