Assume a city's General Fund has $75,000 of inventory, $600,000 of long-term loans receivable (not constrained to any particular use), $250,000 long-term loans due from other funds (not constrained to a particular use), and $1,900,000 of investments. Based solely on this information, the city's nonspendable fund balance would be

Question

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Nonspendable fund balance includes items that cannot be spent, such as inventory or long-term loans receivable. The total of the nonspendable fund balance is the sum of these items. The sum of the inventory, long-term loans receivable, long-term loans due from other funds, and investments is $2,825,000. Therefore, the nonspendable fund balance is $2,825,000 minus $1,900,000 (the investments, which can be sold and the proceeds used for spending) which equals $925,000.

Assume a City's General Fund Has $75,000 of Inventory, $600,000