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:

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The $5,000,000 principal payment is not an expense in government-wide financial statements, so it is added back. The $4,000,000 bond proceeds are not revenue in government-wide statements, so they are subtracted. The net effect is a $1,000,000 increase.

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