In accordance with GASB 34, Basic Financial Statements—and Management’s Discussion and Analysis—for State and Local Governments, a reconciliation must be shown of the items that cause the difference between (1) the total of the fund balances that appears on the balance sheet for the governmental funds and (2) the total net assets that are disclosed for governmental activities on the government-wide statement of net assets. Which of the following items would be disclosed in this reconciliation?

  1. I. Capital assets used in governmental activities.
  2. II. The assets and liabilities of internal service funds included in governmental activities.
    1. a. I only.
    2. b. II only.
    3. c. Both I and II.
    4. d. Neither I nor II.