Which classifications can a fund balance be categorized into?

Fund balances in governmental accounting are categorized into classifications that reflect the constraints placed on their use. The correct categorization includes non-spendable, restricted, committed, assigned, and unassigned fund balances, as outlined by the Governmental Accounting Standards Board (GASB).

Non-spendable fund balances refer to amounts that cannot be spent because they are either in a non-liquid form (like inventory) or legally or contractually required to remain intact. This ensures that certain resources are preserved for their intended purpose.

Restricted fund balances are those that are constrained by external parties, such as creditors, grantors, or laws and regulations. This entails that the resources must be used for specific purposes, thereby safeguarding funds for designated projects or activities.

Committed fund balances are those that the government has formally set aside for specific purposes through legislation, policy, or formal resolution, indicating the intent to utilize these resources for a defined purpose in the future.

Assigned fund balances are resources that have been set aside by the governing authority for a specific purpose, where the intent and direction are less formal than those for committed balances.

Unassigned fund balances include resources that are available for any purpose, providing flexibility in funding various needs that may arise.

The other classifications mentioned do not align with