Which equation represents the Fund Balance Formula?

• A. Revenues + other sources - expenditures and other uses = net change to fund balance
• B. Assets - Liabilities = Net Position
• C. Beginning Fund Balance + Revenues - Expenditures = Ending Fund Balance
• D. Cash Receipts - Cash Disbursements = Fund Balance

Answer: (A)

In fund balance accounting, the balance changes when resources come in and when they go out. The Fund Balance Formula expresses the net change to fund balance as Revenues plus other financing sources minus Expenditures minus other financing uses. This captures how revenues and financing increase the fund, while expenditures and uses decrease it. That net change is what you add to the Beginning Fund Balance to get the Ending Fund Balance. The other options either omit important components (like other financing sources/uses), mix up concepts (net position rather than fund balance), or focus on cash flow rather than the full fund balance equation.