Final answer:
Inventories are the correct asset to be reported on a governmental funds balance sheet, as other options are not recognized under the modified accrual basis of accounting used by governmental funds.
Step-by-step explanation:
The question pertains to which assets would be appropriately reported on the governmental funds balance sheet. Among the options provided, the correct asset that would be reported on a governmental fund balance sheet is inventories. Governmental funds use the modified accrual basis of accounting, which recognizes capital assets, such as infrastructure, buildings, and equipment, as expenditures rather than assets and does not report long-term liabilities on the balance sheet. Therefore, deferred charges for debt issuance costs, capital assets, and goodwill are not reported on the balance sheets of governmental funds. Inventories, however, are reported as assets because they represent current financial resources that are available for use.