How should that portion of investment income earned from the investment of endowment contributions that is required to be used to maintain the purchasing power of the endowment be accounted for if the not-for-profit organization uses the restricted fund method of reporting and has an endowment fund?
Do-Good Inc. is a newly formed not-for-profit organization. On January 1, 2018, its first day of operations, Do-Good purchased equipment costing $8,000. The equipment is estimated to have a useful life of 4 years, with no residual value at that time. This transaction was the only transaction that took place to date. The equipment was purchased from an unrestricted contribution of $8,000.
A) As a direct increase in net assets in the general fund.
B) As a direct increase in net assets in the endowment fund.
C) As investment income in the endowment fund.
D) As investment income in the general fund.
C) As investment income in the endowment fund.
You might also like to view...
Apply the three steps of the innovation process to the example of Free Rice founded by computer programmer John Breen, as stated in the textbook.
What will be an ideal response?
A contract that requires a seller to deliver goods to the carrier is a
a. destination contract. b. shipment contract. c. C.I.F. contract. d. C.O.D. contract.
Andrew agrees to paint Rosalene's house for $500 . Two days after he starts the job, he decides that $500 isn't enough money. He refuses to finish the job, unless Rosalene agrees to pay him $100 more. What principle applies to this fact situation?
a. The acceptance of additional money to settle a disputed claim is supported by consideration. b. A past obligation is sufficient consideration for a new promise. c. Andrew was already obligated to paint the house. He gives no additional consideration in return for Rosalene's promise to pay more money. d. Rosalene has made a promise in exchange for a forbearance.
Which of the following manufacturers would most likely use job-order costing?
A. Microchip processors. B. Fertilizer manufacturers. C. Custom-furniture manufacturers. D. Gasoline refiners. E. Chemical manufacturers.