Which of the Following Statements Is True About Fund Balance

question 28

Multiple Choice

Which of the following statements is true about Fund Balance classifications for the governmental funds?

• A) A restricted fund balance is for monies the governing board has appropriated.
• B) An assigned fund balance has been designated for a specific purpose and is restricted to use for only that purpose.
• C) An unassigned fund balance has no restriction for use of the money and is only applicable to the General Fund.
• D) A committed fund balance has been designated by an outside party for a particular use.
• E) A non-spendable fund balance is designated only for Permanent Fund balances.

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Definitions:

Private Demand

The desire and willingness of individuals and entities to purchase goods and services in a free market.

Crowding Out

A situation where increased government spending leads to reduced investment in the private sector, often due to higher interest rates.

Multiplier

A factor by which an initial change in aggregate spending will alter total economic output through a series of induced spending.

Interest Rate

The amount charged, expressed as a percentage of the principal, by a lender to a borrower for the use of assets.