Final answer:
The statement is true; the government-wide statement of Net Position reports the net pension liability for both governmental and business-type activities. This reflects on a statement resembling a T-account, with net pension liability being part of the liabilities that, along with assets, define the government's net position.
Step-by-step explanation:
The statement that the government-wide statement of Net Position reports the net pension liability for employees engaged in governmental and business-type activities is true. The government-wide financial statements, which include the statement of Net Position, provide a comprehensive overview of a government's overall financial health, including both governmental and business-type activities. These statements adhere to the full accrual basis of accounting. In this context, the net pension liability represents the difference between the total pension liability and the pension plan's fiduciary net position, and it is reported on the statement of Net Position for both governmental and business-type activities.
Understanding how a T-account works can help clarify this concept. The "T" in a T-account serves to separate a firm's assets, on the left, from its liabilities and net worth, on the right. In the case of a government or a business, like a bank, liabilities include the amounts owed to others, such as bank deposits, and the net worth or equity represents the difference between assets and liabilities. Hence, on the government-wide statement of Net Position, the net pension liability is part of the liabilities that are reported alongside assets and net position (net worth).