A City receives a state grant of $100,000 that must be used for 'Public Safety Training'. At year-end, the funds have not been spent. How should this amount be classified in the General Fund Balance?

Answer options:

Committed

Restricted

Assigned

Unassigned

How to approach this question

Hierarchy: Nonspendable -> Restricted (External) -> Committed (Internal Highest Level) -> Assigned (Internal Intent) -> Unassigned.

Full Answer

B.Restricted✓ Correct

Restricted fund balance includes amounts constrained by external parties (creditors, grantors, laws). Since the State (grantor) imposed the restriction, it is Restricted.

Common mistakes

Confusing Restricted (External) with Committed (Internal).

Question 45 All questions Question 47

Practice the full CPA BAR Practice Exam 2

50 questions · hints · full answers · grading

More questions from this exam

Q01Orion Manufacturing provided the following data for the current year:<br/><br/>- Net Sales: $5,00...Hard Q02A company has a Debt-to-Equity ratio of 1.5 and a Times Interest Earned (TIE) ratio of 4.0. The c...Hard Q03An analyst is reviewing a company's quarterly revenue data using a visualization tool. The trend ...Hard Q04TechSolutions Inc. reports Net Income of $500,000. The following items are included in the calcul...Hard Q05A company is implementing a Balanced Scorecard. They have identified 'Employee Training Hours per...Hard

View all 50 questions →