The highest level of decision-making authority for the City of Palo Pinto passes an ordinance that states that all royalty payments received from oil or gas production on city property must be used for street maintenance or improvements.As of the end of its current fiscal year,the city has $1,250,000 of unspent royalty payments.These amounts should be reported as part of:
A)nonspendable fund balance
B)restricted fund balance
C)committed fund balance
D)assigned fund balance
E)unassigned fund balance

Question

Quizplus · Accepted Answer

The ordinance passed by the highest level of decision-making authority indicates a formal commitment of the funds for a specific purpose, which classifies the unspent royalty payments as a committed fund balance.

The Highest Level of Decision-Making Authority for the City of Palo