Assume a government reported 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 assets in the governmental funds column in the Statement of Activities,a decrease of $1,000,000 would be entered.

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Quizplus · Accepted Answer

In governmental accounting, bond proceeds are recorded as revenue in the fund financial statements but must be adjusted out in the government-wide financial statements to avoid overstating net assets, as they represent a liability, not revenue.

Assume a Government Reported Proceeds of Bonds in the Amount