A Public University Received a Restricted Donation from One of Their

question 23

Multiple Choice

A public university received a restricted donation from one of their trustees. The donation was to be used to pay debt service costs for one year on the new athletic field. When received, the donation will be reported on the statement of cash flows as

• A) Operating activities.
• B) Noncapital financing activities.
• C) Capital and related financing activities.
• D) Investing activities.

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Definitions:

Economic Profit

The profit from business activities minus both the explicit and implicit costs, including opportunity costs.

Accounting Profit

The net income of a business as calculated by subtracting total expenses from total revenues, following standard accounting principles.

Marginal Costs

The additional expense incurred from the creation of one extra unit of a product, essential in economic decision-making.

Marginal Cost Curve

A graphical representation showing the cost of producing one more unit of a good.