Which of the following fund balance classifications represents amounts that can only be used for specific purposes pursuant to constraints imposed by external providers (creditors, grantors) or legislation?

Answer options:

Committed

Assigned

Restricted

Nonspendable

How to approach this question

Recall the hierarchy (NU CAR): Nonspendable, Restricted (External), Committed (Internal - Highest Level), Assigned (Internal - Intent), Unassigned.

Full Answer

C.Restricted✓ Correct

Restricted fund balance represents amounts constrained by external parties (creditors, grantors, laws) or constitutional provisions. Committed and Assigned are internal constraints.

Common mistakes

Confusing Restricted (External) with Committed (Internal).

Question 43 All questions Question 45

Practice the full CPA BAR Practice Exam 3

50 questions · hints · full answers · grading

More questions from this exam

Q01Orion Manufacturing provides the following financial data for the current year:<br/><br/>- Net Sa...Hard Q02A manufacturing company uses a standard cost system. For the month of June, the following data is...Medium Q03A financial analyst is reviewing a company's sales data using a visualization tool. The scatter p...Medium Q04TechStart Inc. reports Net Income of $500,000. The income statement includes:<br/>- Depreciation ...Medium Q05A company produces two products, A and B. Under its traditional costing method, the company alloc...Medium

View all 50 questions →