Final answer:
A federal agency's Statement of Net Position subtracts direct revenues from program costs, similar to the government-wide Statement of Activities. This financial statement helps to assess the financial condition of the agency at the end of a fiscal year.
Step-by-step explanation:
Similar to the government-wide Statement of Activities for state and local governments, a federal agency's Statement of Net Position subtracts direct revenues from program costs. The correct answer is A. Net Position. When evaluating the financial health and sustainability of a federal agency or any level of government, the Statement of Net Position provides a snapshot of the agency's financial standings at the end of a fiscal year, which starts on October 1 and ends on September 30 the following year. In contrast, a deficit would refer to the annual budget shortfall between revenues and expenditures, as seen in a different part of financial reporting.
All levels of government, whether federal, state, or local, depend on various sources of revenue to finance their expenditures, and these budgets can be affected by policy decisions and unexpected events that may disrupt earlier tax and spending plans. The federal government, for instance, has increased its ability to raise revenue and therefore spend more since the ratification of the Sixteenth Amendment in 1913. Budgets are essential documents that reflect the financial strategies and priorities of a government entity.