A Governmental Fund's Statement of Revenues, Expenditures, and Changes in Fund

question 117

Multiple Choice

A governmental fund's Statement of Revenues, Expenditures, and Changes in Fund Balances reported expenditures for capital outlay in the amount of $5,000,000. Capital assets for that government cost $110,000,000, including $20,000,000 in land. Depreciable assets are amortized over 20 years, on average. The reconciliation from the governmental funds changes in fund balances to the governmental activities change in Net Position would reflect aan) :

• A) Increase of $250,000.
• B) Decrease of $250,000.
• C) Increase of $500,000.
• D) Decrease of $500,000.

---

Definitions:

Adjusting Entry

An accounting journal entry made at the end of an accounting period to allocate income and expenditure to the appropriate years, ensuring financial statements are accurate.

Accounting Period

A specific duration of time used for financial reporting, usually quarterly or annually.

Supplies Expense

Supplies expense is the cost of consumable items used during the operating cycle of a business, such as office supplies, which are expensed as they are consumed.

Adjusting Journal Entry

Adjustments made in the financial books at the period's end to accurately distribute profits and costs to the period they belong.