Question

Section A provides a list of the results of Allentown’s analysis of its governmental fund balances at its fiscal year end. Section B provides a list of the possible classifications for reporting the items listed in Section A. Required Using the choices provided in Section B, choose the classification of reporting that would most likely be used in the situations given in Section A. 6.Allentown had a balance in its prepaid insurance account of $464,000 at the end of the fiscal year.

Section A

7.At the end of the reporting period, Allentown's general fund statement of revenues, expenditures, and changes in fund balances reported a net change in fund balances of $154,238

8. Allentown's mayor indicated that he was setting aside $25,000 of funds for the future purchase of land for a town park.

9.The Allentown council passed an ordinance requiring that 5% of the towns sales tax revenue be set aside for economic development, this year that amount was $24,650

10.The capital projects fund ended the reporting period with a negative fund balance.

Section B

Answers will either be:

Nonspendable

Restricted

Committed

Assigned

Unassigned

Answer 1

Non-spendable fund balance: The balance of fund not in a spendable form and are maintained for legal or contractual requirements is called non-spendable fund. Restricted fund balance: A fund that is required to be spent for a specific purpose is called restricted fund balance Committed fund balance: The portion of fund balance committed to a specific purpose by the highest government authority is called committed fund balance Assigned fund balance: The amount of fund balance intended to be use for specific purpose but not classified as restricted or committed fund is called assigned fund balance Unassigned fund balance: The spendable fund balance not categorized under any restricted, assigned and or committed fund balance A's town had a balance in its prepaid insurance account of $464,000 at the end of the fiscal year - Non-spendable At the end of the reporting period, A's general fund statement of revenues, expenditures and changes in fund balance reported a net change in fund balance of $154,238 Unassigned A's mayor indicated that he was setting aside $25,000 of funds for the future purchase of land for a town park - Assigned The A's council passed an ordinance requiring that 5% of the town's sales tax revenue be set aside for economic development, this year that amount was $24,650 Committed 10 The capital projects fund ended the reporting period with a negative fund balance Unassigned