Question

a balance sheet must be prepared on the first day of the year.
true
false

question 25
a fund balance reports assets plus liabilities.
true
false

Explanation:

🆕 New Concept Discovered: Fund Accounting Equation
The net worth of a governmental fund.

Step 1: Define Fund Balance

In governmental and non-profit accounting, a "fund balance" represents the net position of a governmental fund. It is the difference between the assets (what is owned) and the liabilities (what is owed) within that specific fund.

Step 2: Apply the Accounting Equation

The fundamental accounting equation for a fund is:

$$ \text{Assets} - \text{Liabilities} = \text{Fund Balance} $$

Or, rearranged:

$$ \text{Assets} = \text{Liabilities} + \text{Fund Balance} $$

Therefore, a fund balance reports assets minus liabilities, not assets plus liabilities.

Answer:

False