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

question 15

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 the donation was spent during the current year. How should the donation be reported be in the statement of activities?

• A) Revenues without donor restrictions - $100,000.
• B) Revenues without donor restrictions - $20,000.
• C) Revenues with donor restrictions - $100,000.
• D) Revenues with donor restrictions - $20,000.

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Definitions:

Gross Profit

The difference between sales revenue and the cost of goods sold, before deducting overheads, payroll, taxation, and interest payments.

Consolidated Financial Statements

Financial statements that aggregate the financial position of a parent company and its subsidiaries into one document, showing the overall health of the corporate group.

Inventory Purchase

The acquisition of goods and materials that a company intends to sell, considered as a current asset on the balance sheet.

Perpetual Inventory Method

A method of accounting that instantly documents the sale or acquisition of inventory utilizing computerized point-of-sale systems and software for managing enterprise assets.