The Net Position of a government entity is the same as the equity section of the...

The Net Position of a government entity is the same as the equity section of the Balance Sheet (True or False). why?

Expert Solution

True

The financial statements of the two types of proprietary funds-the enterprise funds and the internal service funds are strikingly different from those of the governmental funds. However the statement of net position (balance sheet) and the statement of revenues, expenses, and changes in net position (income statement) look decidedly like those of businesses.

There are, however, a few exceptions. Thus, in this example, the net position (equity) section of the balance sheet takes the form Assets + Liabilities = Net position as opposed to conventional. Assets = Liabilities + Net Position). Further, the net position section highlights the amount of net investment in capital assets (capital assets less related debt) instead of showing contributed capital and retained earnings. Most significant, however, is that like the statements of businesses (and unlike the corresponding statements of governmental funds) the statement of net position reports capital assets and long-term debt, and the statement of revenues and expenses includes depreciation.

ekkarill92 answered 1 year ago

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