The Board of Directors of a Nongovernmental Not-For-Profit Organization Voted

question 10

Multiple Choice

The board of directors of a nongovernmental not-for-profit organization voted to designate $100,000 of its unrestricted net assets to be used for its permanent endowment. Which of the following best describes the accounting and financial reporting implications of this action?

• A) The net assets are still considered unrestricted.
• B) The net assets are now considered temporarily restricted.
• C) The net assets are now considered permanently restricted.
• D) Unrestricted net assets will decrease in total.

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Definitions:

Antecedent

The conditional part of a hypothetical proposition, typically preceding and implying the consequence.

Inconsistent

Lacking compatibility or uniformity, leading to a lack of coherence or agreement.

Truth Tables

A tool in logic and mathematics used to determine whether a proposition is true or false under all possible conditions.

Truth Value

The attribute of a proposition that determines whether it is true or false.