Final answer:
The correct term for the difference between assets and liabilities on a public employee retirement system's statement of plan net position is 'net position' or 'net assets,' not 'fund balance available for member benefits.' The use of 'fund balance' is incorrect in this context; it's typically used for other governmental fund accounting.
Step-by-step explanation:
The statement that public employee retirement systems should label the difference between assets and liabilities on the statement of plan net position as "fund balance available for member benefits" is false. Instead, this difference is termed net position or net assets.
The term "fund balance" is more commonly used in the context of governmental accounting for funds other than pensions, such as the general fund. In accounting, particularly for public employee retirement systems, the accurate labeling on the statement of plan net position reflects the total assets minus total liabilities, which represents the net position or net assets available for member benefits, not the fund balance.
A T-account is used to depict the balance between a bank's assets and liabilities, with the left side showing assets and the right side showing liabilities and net worth. The net worth of the bank, which can be considered as the bank's capital on the balance sheet, is calculated as total assets minus total liabilities and is recorded on the liabilities side to ensure that the two sides of the T-account balance.
When we talk about a bank's net worth or capital, we are referring to the financial strength of the institution. For a healthy bank, net worth will be positive, while it will be negative for a bankrupt firm. Regardless of the bank's financial status, the fundamental equation holds that assets must equal liabilities plus net worth.