Rule: Government-wide financial statements should classify net assets as:

1. Net investment in capital assets

2. Restricted and

3. Unrestricted.

Choice "B" is correct. Net investment in capital assets, restricted and unrestricted.Choice "c" is incorrect. Classification of net assets as permanently restricted, temporarily restricted, and unrestricted is used in not-for-profit entities, not governments.Choice "d" is incorrect. Invested in capital assets, restricted for debt service, and unrestricted are not appropriate classifications per the above rule.Choice "a" is incorrect. Reserved, designated and undesignated, and unreserved were the terms applied to Fund Equity in the governmental reporting standards in effect prior to the issuance of GASB 34.