What is Fund balance classifications?
In short
Governmental funds classify fund balance as nonspendable, restricted, committed, assigned or unassigned, based on how strictly its use is constrained.
Key takeaways
- Nonspendable: not in spendable form, such as inventory or prepaid items.
- Restricted: external constraints (creditors, grantors, laws); committed: formal action by the highest decision-making authority.
- Only the general fund normally reports a positive unassigned balance.
Where it's tested
BAR: Governmental Fund Accounting — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
Which fund balance classification represents amounts constrained by a formal action of the government's highest level of decision-making authority?