The Following Are Fund Balance Classifications Described in Chapter 2

question 22

Short Answer

The following are fund balance classifications described in Chapter 2:
A.Nonspendable
B.Spendable-Restricted
C.Spendable-Committed
D.Spendable-Assigned
E.Spendable-Unassigned
For each of the following scenarios,indicate how they would be classified for fund balance reporting purposes using the classification list above.Place the appropriate letter in the blank space next to each scenario.
_____ 1.Bond proceeds of $15,000,000 that must be used for construction of a fire substation remain unspent at the end of the fiscal year.
_____ 2.Prepaid rent of $6,000 remains at the end of the fiscal year.
_____ 3.The city council adopted a plan to set aside 2% of revenues over the next three years to help build cash reserves. At the end of the fiscal year 2% of the revenues were set aside.
_____ 4.The state transportation department provided $1,000,000 in state funds to be used for street widening. At the end of the fiscal year $750,000 remained unspent.
_____ 5.The county received a $3,000,000 endowment during the year.

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Definitions:

Debt Ratio

A financial ratio that measures the proportion of a company's total debt to its total assets, indicating leverage and financial health.

Days' Sales in Inventory

A financial metric that indicates the average time in days that a company takes to turn its inventory into sales.

Dividend Yield

A financial metric that measures the annual dividends issued by a company compared to the price of its shares.

Total Asset Turnover

A financial ratio that measures how efficiently a company uses its assets to generate sales revenue.