Which of the Following Would Be a Reconciling Item on the Statement

question 21

Multiple Choice

Which of the following would be a reconciling item on the statement of change in net debt?

• A)Adding back the cost of tangible capital assets
• B)Adding back the cost of debt servicing
• C)Adding back amortization expense
• D)Adding back transfer payments to other governments

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Definitions:

Government Grant

financial awards given by governmental bodies to organizations, institutions, or individuals for specific purposes, usually without the expectation of repayment.

Quasi-Endowment Funds

Funds set aside by an organization, often a nonprofit or educational institution, to function like an endowment but which can be accessed under certain conditions, as determined by its governing body.

Operating Reserves

Financial assets set aside by an organization to cover unexpected shortfalls or emergencies, ensuring financial stability and operational continuity.

Permanently Restricted Endowment

A type of endowment fund that a donor restricts in perpetuity; the principal cannot be spent, but the investment earnings can be used for designated purposes.