Choice "D" is correct. If expenditures incurred for specific purposes exceed the amounts restricted, committed or assigned to those purposes, it may be necessary to report a negative unassigned fund balance.Choice "b" is incorrect. A deficit in a governmental fund would not necessarily guarantee a general fund subsidy.Choice "c" is incorrect. A deficit in a grant does not guarantee the ability to recoup overspent amounts from the grantor.Choice "a" is incorrect. Negative fund balances should not be displayed for restricted, committed, or assigned classifications.
