A city has a long-term general government liability for compensated absences of $700,000 at the beginning of the year and $650,000 at the end of the year. What adjustment is needed to changes in fund balance to reconcile the governmental funds operating statement information to the changes in net position for governmental activities in the government-wide statement?

Question

Quizplus · Accepted Answer

The adjustment needed is the change in the liability for compensated absences, which is $50,000 ($700,000 - $650,000). Since this liability relates to governmental activities, the adjustment should be made to the changes in net position for governmental activities in the government-wide statement.

A City Has a Long-Term General Government Liability for Compensated