In Reconciling the Net Change in Fund Balances to the Change

question 34

Multiple Choice

In reconciling the net change in fund balances to the change in net position of governmental activities which of the following would be added to the change in net position of governmental activities?

• A) Issuance of long-term debt.
• B) Construction of capital assets.
• C) Accrual of interest expense.
• D) Depreciation expense.

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Definitions:

Equilibrium Quantity

The quantity of goods or services supplied is exactly equal to the quantity demanded at the market price.

Upward-Sloping Demand

A representation typically contrary to the law of demand, suggesting that as prices increase, the quantity demanded also increases. Generally, this is indicative of Giffen or Veblen goods.

Equilibrium Price

The price at which the quantity of a good or service demanded by consumers is equal to the quantity supplied by producers, leading to market balance.

Velcro

A fastening device consisting of two strips of fabric, one covered with tiny hooks and the other with a dense pile, which adhere when pressed together.