The Friends of the Library (FOL), a Not-For-Profit Entity, Received

question 35

Multiple Choice

The Friends of the Library (FOL) , a not-for-profit entity, received a gift restricted to the acquisition of a special piece of equipment used to restore books. Late last year FOL acquired the machine at a total cost of $19,000. The machine is estimated to have a useful life of eight years and a salvage value of $3,000. In what fund should FOL make the entry to record the depreciation for the current year?

• A) Unrestricted fund.
• B) Fiduciary fund.
• C) Permanently restricted fund.
• D) FOL should not recognize depreciation.

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Definitions:

Vendors

Entities that supply goods or services to other organizations, typically within a business-to-business (B2B) relationship.

Acquisition

The process of obtaining control of another corporation by purchase or stock exchange.

Chemical Company

A business involved in producing and selling chemicals for industrial, agricultural, medical, or consumer markets.

Medical Equipment

Devices used for medical purposes, ranging from simple tools like stethoscopes to complex machines like MRI scanners.