A government reported an Other Financing Source in the amount of $600,000 related to the sale of land in its governmental funds Statement of Revenues, Expenditures, and Changes in Fund Balances. The land had a cost of $150,000. The adjustment in the reconciliation when moving from the changes in fund balances in the Statement of Revenues, Expenditures, and Changes in Fund Balances to the change in Net Position in the Statement of Activities would be:

Question

Quizplus · Accepted Answer

Only the gain on the sale is reported in the Statement of Activities. In the governmental funds, the proceeds from the sale increase financial resources. The change in net position differs from the change in fund balance by the cost of the asset sold. The adjustment would be a decrease of $150,000, the cost of the land.

A Government Reported an Other Financing Source in the Amount