Which statement best describes the calculation for change in net position on the government-wide statement of activities?

• A. Expenses minus program revenues plus general revenues
• B. Program revenues minus expenses
• C. General revenues minus program revenues
• D. Net position equals assets minus liabilities

Answer: (A)

On the government-wide statement of activities, the change in net position shows how the government's resources were consumed and funded during the period. Start with the total expenses for the period. Some of these expenses are offset by program revenues tied to specific programs, so subtracting program revenues from expenses gives the net cost of those programs. General revenues, which come from sources not linked to particular programs (like taxes), then add to that net cost to produce the overall change in net position for the period. So the correct expression is expenses minus program revenues plus general revenues. The other views either ignore the offsetting role of general revenues, or misstate the relationship, or describe the balance sheet concept of net position (assets minus liabilities) rather than the change in net position on the activities statement.