Discuss the term "fund balance".

The term "fund balance" refers to the difference between assets and liabilities in a governmental fund. This concept is crucial in public finance as it reflects the financial position of a government at a specific point in time. Fund balance represents the resources that are available for future spending after accounting for what the government owes.

A positive fund balance indicates that the government has more assets than liabilities, which can signify fiscal health and the ability to fund future programs or projects. The fund balance can be categorized into different classifications, such as restricted, unrestricted, committed, assigned, or unassigned, which further detail how those resources can be utilized.

In contrast to this understanding, total revenue accumulated, total expenditures, or just cash on hand do not encompass the comprehensive nature of what a fund balance entails. For example, total revenue and total expenditures focus solely on one aspect of financial activity, while cash on hand does not account for other current assets or liabilities. Thus, identifying the fund balance as the difference between assets and liabilities provides a more complete picture of governmental financial status.