Which statement is true about debt service fund reporting in government-wide statements?

• A. Debt service funds are reported in the Governmental Activities column in the government-wide financial statements.
• B. Debt service funds are reported as fiduciary funds.
• C. They are not included in government-wide statements.
• D. They are reported in the Business-Type Activities column.

Answer: (A)

The statement being tested is that debt service funds are reported with the governmental activities in the government-wide financial statements. In government-wide reporting, the government presents activities on an accrual basis, combining all governmental fund activities into the Governmental Activities column. Debt service funds are a governmental fund type used to accumulate resources for debt payments, so their assets and liabilities are included within the governmental activities, not as fiduciary funds or as part of business-type activities. Fiduciary funds are not included in government-wide statements because their resources are held for others, not for the government’s own net position, and debt service funds are not proprietary/business-type activities.