Which option correctly lists the GASB fund balance classifications with an example for each?

• A. Nonspendable (inventories), Restricted (grants restricted for a purpose), Committed (self-imposed by governing body), Assigned (intended for specific programs), Unassigned (general fund residual).
• B. Nonspendable (inventories), Spendable (grants with a purpose), Committed (by law), Allocated (program-specific), Reserved (general fund).
• C. Spendable (revenue), Restricted (by statute), Unassigned (surplus), Assigned (debt service).
• D. Nonspendable, Restricted, Committed, Assigned.

Answer: (A)

GASB fund balance classifications divide resources into nonspendable amounts and spendable amounts, with the spendable portion further broken down into restricted, committed, assigned, and unassigned categories. Nonspendable balances are not in a form that can be spent, such as inventories or amounts like prepaid items. The spendable balances carry constraints: restricted funds are limited by external sources such as grants or laws; committed funds are constrained by formal actions of the government’s highest decision-making body; assigned funds are intended for a specific purpose as designated by management; and unassigned funds represent the general fund’s residual amount when no other constraints apply. For example, inventories are nonspendable; grants restricted for a particular purpose are restricted; funds set aside by a formal action of the governing body are committed; amounts designated for a specific program are assigned; and the general fund’s leftover balance is unassigned. This structure aligns with how governments track and report available resources under GASB.