Question 1: Governmental Reporting Having recently graduated the Accounting Program at Baruch, you are hired by the administrative office of the township of Hudson River, NY. The township has a new mayor who enjoys stating they are "not good with numbers." The new mayor, however, appreciates the importance of understanding the town's financial position - among others, they have made a lot of expensive promises while campaigning and would like to understand how they can honor them. The mayor has been given four statements - the government-wide statement of net assets, the government-wide statement of activities, the balance sheet for the General Fund, and the statement of revenues, expenditures and changes in the fund balances of the General Fund. They request your help with the following: 1. The mayor has noticed that sometimes the expenses on one statement equal the expenditures on another. What is the difference between expenses and expenditures and why do they (only) sometimes equal each other? 2. The mayor also has noticed that assets minus liabilities equals net assets on one statement, but assets minus liabilities equals the fund balance on another. How can this be? Shouldn't they be the same? What is the difference between the two? Please explain. 3. The total fund balance seems to have increased in the past year, but total net assets decreased. How could this happen? 4. The mayor decides they don't want to look at all four statements and want to know which one they should look at to figure out how much they can spend on their campaign promises. What is your recommendation and why?