Choice "A" is correct. The elimination of the book value of a previously acquired asset has no impact on fund financial statements but serves to reduce the changes in net position of the government-wide financial statements as the asset is written off (net of proceeds and accumulated depreciation). The book value of capital assets is, therefore, essentially subtracted from change in fund balance to reconcile to the change in government-wide net position. Actual reconciling items might focus more on the computation of a gain or loss and proceeds from the disposal rather than individual components such as the asset book value.
Choice "c" is incorrect. Capital asset purchases are added back to the changes in fund balance to reconcile to the change in net position displayed on the government-wide statement of activities. Capital asset purchases are displayed as an expenditure in fund financial statements but are capitalized in the government-wide financial statements. Capital outlay is the "E" in "GOES" and is added back, not subtracted.
Choice "b" is incorrect. Payment of long term debt principal is added back to the changes in fund balance to reconcile to the change in net position displayed on the government-wide statement of activities. Payment of long term debt principal is displayed as an expenditure in fund financial statements but is shown as a reduction liabilities in the government-wide financial statements. Principal payment on debt is part of the "E" in "GOES" and is added back, not subtracted.
Choice "d" is incorrect. Increases in internal service fund net position would be added to the changes in fund balance to reconcile to the change in net position displayed on the government-wide statement of activities. A net loss in the internal service funds would be subtracted. Internal Service fund activity is the "S" in "GOES" and is added back.