A city has a long-term general government liability for compensated absences of $700,000 at the beginning of the year and $650,000 at the end of the year. What adjustment is needed to the change in fund balances to reconcile the governmental funds operating statement information to the change in net position for governmental activities in the government-wide statement?

1. $(50,000).
2. $50,000.
3. $650,000.
4. $700,000.