Assume a government reported $300,000 in capital outlay expenditures in the governmental fund Statement of Revenues,Expenditures,and Changes in Fund Balances.Secondly,assume depreciation of capital assets amounted to $250,000,in the governmental activities column in the Statement of Activities.Those adjustments would cause a decrease of $50,000 when preparing the reconciliation between the change in governmental fund balances to the change in net assets of governmental activities in the Statement of Activities.

Question

Quizplus · Accepted Answer

The adjustments would cause an increase of $50,000 in the reconciliation, not a decrease. The capital outlay expenditure of $300,000 would be added back, and the depreciation of $250,000 would be subtracted, resulting in a net increase of $50,000.

Assume a Government Reported $300,000 in Capital Outlay Expenditures in the Governmental