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What Is a Fund Balance?
Government entities report equity in governmental and trust funds as fund balance.
A fund balance operates similar to savings accounts and is the difference between governmental fund assets and liabilities reported on the balance sheet. Governmental and nonprofit accounting both uses the concept of fund accounting. In fund accounting, the entity is divided into subsets or funds, each with its own self-balancing set of accounts. A look at the various types of funds can lead to a better understanding the impact this has on accounting disciplines. …
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