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:

Pension Asset/Liability

Represents the surplus or deficit in a company's pension plan, indicating whether assets are sufficient to cover pension obligations.

Funded Status

The financial status of a pension plan, usually indicating the extent to which assets cover liabilities.

Past Service Cost

The cost of additional retirement benefits awarded for an employee's service in prior periods, typically arising from plan amendments.

Service Cost

The portion of the projected pension benefit that is attributed to employee's service in the current year, often used in accounting for pension expenses.