A government's Statement of Revenues,Expenditures,and Changes in Fund Balances reflected proceeds of bonds in the amount of $1,000,000.That statement also reflected expenditures for debt service in the amount of $3,000,000,including $2,600,000 for principal payments.Assuming no other changes,the effect,when moving from the change in fund balances in the governmental funds Statement of Revenues,Expenditures,and Changes in Fund Balances to the change in net assets for governmental activities in the Statement of Activities would be a:

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The proceeds from bonds ($1,000,000) are not considered revenue in the Statement of Activities, so they are subtracted. The principal payment ($2,600,000) reduces liabilities and is added back. The net effect is a $1,600,000 increase ($2,600,000 - $1,000,000).

A Government's Statement of Revenues,Expenditures,and Changes in Fund Balances Reflected