Assume a city's General Fund has $75,000 of inventory, $600,000 of long-term loans receivable, $250,000 long-term loans due from other funds, and $1,900,000 of investments. Based solely on this information, the city's nonspendable fund balance would be

Question

Quizplus · Accepted Answer

The nonspendable fund balance represents resources that are not in a spendable form. The inventory and long-term loans receivable cannot be spent as they are not in a form that can be readily converted to cash. Therefore, the nonspendable fund balance is $75,000 (inventory) + $600,000 (long-term loans receivable) = $675,000. The long-term loans due from other funds and investments are not considered nonspendable as they can be easily converted to cash if needed. Thus, the total nonspendable fund balance is $675,000 + $250,000 (long-term loans due from other funds) = $925,000.

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