Which statement is true regarding other financing sources and other financing uses?

• A. They must be reported together with revenues and expenditures
• B. They are reported separately from revenues and expenditures in the statement of revenues, expenditures, and changes in fund balances
• C. They are reported only on government-wide statements
• D. They are not reported in the statement of revenues, expenditures, and changes in fund balances

Answer: (A)

In governmental funds, financing activities are shown in the same statement that presents operating results, so readers can see how both operating revenues/expenditures and financing sources/uses affect the fund balance. Other financing sources and uses include items like debt proceeds, interfund transfers, and the sale or disposal of assets financed outside of regular operating revenue. Because these financing activities impact the fund balance, they belong together with revenues and expenditures in the statement of revenues, expenditures, and changes in fund balances.

So they are reported together in that statement to show the net change in fund balance from both operating and financing activities. They are not reported separately from revenues and expenditures, nor are they limited only to government-wide statements, nor omitted from that fund statement.