In the government balance sheet equation, which term represents the residual interest after liabilities are deducted?

• A. Net Position
• B. Assets
• C. Liabilities
• D. Revenue

Answer: (A)

Net Position represents the residual interest in the government's assets after deducting liabilities. In government balance sheet terms, assets = liabilities + net position, so net position is what remains when liabilities are subtracted from assets (net position = assets − liabilities). This shows the government's net resources and claims available to fund activities, and it can be further categorized as unrestricted, restricted, or invested in capital assets. Revenue influences net position over time but is not the residual on the balance sheet, while assets and liabilities are the resources and obligations themselves, not what's left after obligations are met.