What are the three components of net position displayed on government-wide financial statements?

The correct answer identifies the three components of net position displayed on government-wide financial statements, which include "Invested in capital assets, net; restricted; unrestricted."

This classification is essential as it provides a clear understanding of how resources are allocated within government entities and indicates the financial health of the government.

• "Invested in capital assets, net" reflects the value of the government's capital assets after deducting any related debt, thereby showcasing the funding invested in long-term physical assets like infrastructure, buildings, and land.

• "Restricted" represents resources that have constraints placed on their use, whether imposed by external parties, such as creditors or grantors, or by law. This is important for transparency and accountability, as it shows that certain assets are earmarked for specific purposes.

• "Unrestricted" indicates resources that are not subject to any constraints and can be used freely for general government operations or any other purpose deemed necessary.

These components collectively offer a picture of the overall financial position of the government entity, distinguishing between resources that can be used flexibly and those that are set aside for particular obligations or future needs.