Final answer:
Appropriate assets reported on governmental funds balance sheets are b) Accounts Receivable and d) Prepaid Expenses. Capital Assets and Long-term Debt are included in government-wide financial statements. A deficit is the annual shortfall between revenues and expenditures.
Step-by-step explanation:
The assets that would appropriately be reported on the governmental funds balance sheet are b) Accounts Receivable and d) Prepaid Expenses. In governmental fund accounting, the focus is on short-term financial resources; therefore, capital assets (a) and long-term debt (c) are not reported on the balance sheets of governmental funds. Instead, capital assets and long-term debt are reported in the government-wide financial statements, which utilize the accrual basis of accounting and present a longer-term perspective.
As for bonds they are considered an asset because they also provide a stream of income, just as loans offer for the banking institutions that hold them.
In response to the separate question about a deficit, the correct answer is b) the annual budget shortfall between revenues and expenditures. A deficit refers specifically to the annual gap when a government's spending exceeds its revenues within a given fiscal year.