Assume a government reported Other Financing Sources - Proceeds of Bonds in the amount of $1,000,000 in the governmental fund Statement of Revenues,Expenditures,and Changes in Fund Balances. When preparing the reconciliation from the changes in fund balances in that statement to the changes in net position in the governmental funds column in the Statement of Activities,an increase of $1,000,000 would be entered.

Question

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When preparing the reconciliation from the changes in fund balances in the Statement of Revenues,Expenditures,and Changes in Fund Balances to the changes in net position in the governmental funds column in the Statement of Activities, Other Financing Sources - Proceeds of Bonds should be subtracted from the changes in fund balances because it is a financing source and not a revenue. Therefore, the increase of $1,000,000 in Other Financing Sources - Proceeds of Bonds should be entered as a decrease of $1,000,000 in the reconciliation.

Assume a Government Reported Other Financing Sources - Proceeds of Bonds