Which of the following could NOT be reported in the governmental fund statement of revenues, expenditures, and changes in fund balances?

In the governmental fund statement of revenues, expenditures, and changes in fund balances, certain items are specifically defined due to the nature of governmental accounting, which differs from private sector accounting.

Expenditures are reported in governmental fund statements, detailing the amounts spent to provide services. This reflects the financial resources used during the period. Therefore, reporting expenditures is a fundamental aspect of the statement.

Gains and losses, however, are associated with the sale of capital assets, investments, or similar transactions and are not typically reported within the framework of governmental fund accounting. Instead, governmental funds focus on the flow of current financial resources.

Special items and extraordinary items are indeed reported, as they can provide important information about unusual or infrequent events affecting the governmental entity. Special items are those that are both unusual in nature and infrequent in occurrence, while extraordinary items are both unusual in nature and occur infrequently.

Thus, since gains and losses, as well as expenses, do not align with the common reporting practices of governmental fund financial statements, they would be excluded from this type of report. This understanding confirms why the selected response is appropriate: A and B represent items that would not be found in the governmental fund statement.