Which item is NOT part of the non-spendable fund balance?

The concept of non-spendable fund balance encompasses resources that cannot be spent because they are either not in spendable form or are legally or contractually required to be maintained intact. Items considered non-spendable include inventories, long-term receivables, and prepaid items, as these represent resources that are either physical goods not yet consumed or service agreements already paid for and thus cannot be converted into cash for spending in the short term.

Cash reserves, on the other hand, represent liquid assets that are readily available for spending. Unlike the other items listed, cash reserves are generally considered part of the spendable fund balance because they can be used to meet current obligations and can be easily converted to cash for expenditures. Therefore, cash reserves do not fit the criteria for non-spendable fund balance, making it the correct choice in this question.