A government's Statement of Revenues,Expenditures,and Changes in Fund Balances reported proceeds of bonds in the amount of $1,800,000. It also reported expenditures for bond principal in the amount of $400,000. The last interest payment was on the last day of the fiscal year. The reconciliation from the governmental funds changes in fund balances to the governmental activities change in Net Position would reflect a(an):

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The $1,800,000 in bond proceeds was received during the fiscal year, and $400,000 was used to pay bond principal, leaving $1,400,000. Since the last interest payment was on the last day of the fiscal year, none of the interest was used to pay bond principal during the year. Therefore, the remaining $1,400,000 would be added to the government's fund balance, increasing it. However, in order to reconcile to the change in net position of the government's governmental activities, the $1,400,000 increase in fund balance must be offset by a decrease in deferred inflow of resources related to the bond proceeds, resulting in a net decrease of $1,400,000.

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