Which item would appear on a governmental funds balance sheet?

• A. Bonds payable
• B. Taxes receivable
• C. Cash
• D. Equipment

Answer: (C)

In governmental funds, the balance sheet focuses on current financial resources—the assets that are readily available to finance current operations. The most fundamental of these resources is cash, which is always reported as a current asset in the governmental funds balance sheet. Long-term assets like equipment and long-term obligations like bonds payable do not appear in the governmental funds balance sheet because those funds use a current resources measurement focus and emphasize near-term inflows and outflows. Taxes receivable could appear as a current asset in some governmental funds under the measuring rules, but cash is the item that is universally present and clearly part of the fund’s available resources.