A Nongovernment Not-For-Profit Organization Received a Cash Donation of $100,000

question 10

Multiple Choice

A nongovernment not-for-profit organization received a cash donation of $100,000 restricted for a specific operating purpose. Only $20,000 of expenses related to the specific operating purpose was incurred during the current year. How should this activity be reported be in the statement of activities?

• A) Expenses in changes in net assets without donor restrictions, $20,000.
• B) Expenses in changes in net assets with donor restrictions, $20,000.
• C) Both revenues of $100,000 and expenses of $20,000 in changes in net assets without donor restrictions.
• D) Both expenses and net assets released from restrictions of $20,000 in changes in net assets with donor restrictions.

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Definitions:

Compensation System

Compensation System is the structure and methodology an organization uses to pay its employees, including wages, salaries, bonuses, and benefits.

Seasonal Fluctuations

Variations in economic or business activity that occur as a result of seasonal changes, affecting industries such as tourism, agriculture, and retail.

Sales Competition

A contest among sales personnel or teams to motivate them to increase sales performance and achieve specific targets.

Sales Territory

A designated geographical area assigned to a salesperson or team where they are responsible for conducting business activities.