Net Assets Represented by Supplies and Prepaid Expenses Are Classified

question 93

True/False

Net assets represented by supplies and prepaid expenses are classified in governmental funds as Nonspendable Fund balance.

---

Definitions:

Going Out of Business

The process of closing down all operations of a company, often due to financial troubles or bankruptcy.

Fixed Cost

Expenses that do not vary with the level of output or sales, such as rent, salaries, and insurance.

Variable Cost

Costs that vary directly with the level of production or output, such as raw materials and direct labor expenses.

Total Cost

The complete cost of production that includes both variable and fixed expenses.