A governmental fund has total liabilities in excess of its total assets at the end of the fiscal year.It has no deferred resource inflows or outflows.Which of the following statements is always true?
A)fund balance is negative
B)cash is less than short-term receivables
C)payables exceed receivables
D)payables exceed cash

Question

Quizplus · Accepted Answer

A governmental fund with total liabilities in excess of its total assets has a negative fund balance, which indicates that the fund has incurred a deficit. The other options do not necessarily have to be true in this scenario. Cash may be greater than receivables, and payables may not necessarily exceed cash or receivables.

A Governmental Fund Has Total Liabilities in Excess of Its