CASBO Chief Business Official (CBO) Practice Test

How many fund balance classifications are defined by GASB54?

4 5 6 7

Correct Answer:

Explanation:

Fund balance classifications defined by GASB 54 total five. These categories are used to show what constraints apply to resources: Nonspendable (amounts not in spendable form, like inventories or prepaids); Spendable restricted (resources limited by external sources such as laws or grant agreements); Committed (resources constrained by formal action of the government's highest decision‑making authority); Assigned (resources constrained by the government’s intent to spend for specific purposes); and Unassigned (the residual in the General Fund, available for any purpose). In practice, Unassigned is typically shown only in the General Fund, while other funds reflect the applicable combination of the other categories.

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