Reclassifying Net Assets from Temporarily Restricted to Unrestricted

question 47

Multiple Choice

Reclassifying net assets from temporarily restricted to unrestricted:

• A)​is done when the unrestricted net assets fall below a predetermined threshold.
• B)​matches the net assets to the expenses they support.
• C)​does not require a formal journal entry.
• D)​may be done at the organization's discretion when an expense is incurred for a purpose for which both restricted and unrestricted net assets are available.

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Definitions:

Scarce Resources

Resources that are limited in availability and are used to produce goods and services, leading to the necessity of making choices about their allocation.

Efficiency

The effectiveness with which resources are used to produce goods and services, achieving the highest output with the lowest input.

Efficiency

The degree to which resources are used optimally to achieve a desired outcome, minimizing waste and maximizing output.

Equality

The situation where individuals have the same rights, opportunities, and status.