Which statement best describes the recommended format for the government-wide statement of activities?

• A. Expenses minus program revenues plus general revenues equals change in net position
• B. Net position equals assets minus liabilities
• C. Program revenues minus expenses equals net position
• D. Revenues minus expenses equals change in net position

Answer: (A)

The government-wide statement of activities presents how much a government spent (expenses) to provide services and how those costs are funded, resulting in the change in its net position. The best format shows expenses, subtracts the program revenues tied to those expenses, and then adds general revenues to arrive at the overall change in net position. In formula terms: change in net position = expenses − program revenues + general revenues. Program revenues are revenues generated by specific programs and are intended to offset those program costs, while general revenues come from broad sources not linked to any single program. This arrangement shows the net cost of each function or program after applying the offsetting program revenues and then incorporates general revenues to show the total change in resources. For contrast, simply stating net position as assets minus liabilities reflects the balance sheet, not the activities statement; reversing the order or omitting general revenues would misstate how program costs are offset and how total change in resources is calculated.