Does a credit balance in the fund balance account(s) at the end of the year necessarily mean the fund has sufficient cash to pay its liabilities in a timely manner? Explain.
Does a credit balance in the fund balance account(s) at the end of the year necessarily mean the fund has sufficient cash to pay its liabilities in a timely manner? Explain.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Does a credit balance in the fund balance account(s) at the end of the year necessarily mean the fund has sufficient cash to pay its liabilities in a timely manner? Explain.
Expert Solution
Step 1
In case if in the fund balance accounts, there is a credit balance then it doesn't mean that the business entity is able to meet their liabilities on time due to the availability of sufficient cash.
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