A government's Statement of Revenues, Expenditures and Changes in Fund Balances reflected expenditures for debt service in the amount of $12,000,000, including $5,000,000 for principal. It also reflected proceeds of bonds in the amount of $4,000,000. No interest accruals were involved. When moving from the changes in fund balances reported for the governmental funds to the change in net assets for governmental activities, the net change would be:

Question

Quizplus · Accepted Answer

The net change in net assets for governmental activities would be a $1,000,000 increase because the proceeds of bonds ($4,000,000) would be added to the net assets, and the principal payment on debt service ($5,000,000) would be subtracted from the net assets.

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