Final answer:
Nitrogen-fixing bacteria do not convert nitrogen gas (N2) into organic compounds.
Step-by-step explanation:
The false statement regarding nitrogen balance is option D) Nitrogen-fixing bacteria convert nitrogen gas (N2) into organic compounds. Nitrogen-fixing bacteria actually convert nitrogen gas (N2) into ammonia (NH3) or ammonium (NH4+) which can be used by plants to synthesize organic compounds like amino acids and proteins.