How Should Investment Income Earned from the Investment of Endowment

question 28

Multiple Choice

How should investment income earned from the investment of endowment contributions be accounted for if the not-for-profit organization uses the restricted fund method of accounting and the use of the investment income is restricted to a specific purpose for which the not-for-profit organization has a restricted fund?

• A) As investment income in the endowment fund
• B) As a deferred contribution
• C) As investment income in the general fund
• D) As investment income in the specific restricted fund

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Definitions:

Command-and-Control

A management style characterized by strict authority, where decisions are made at the top and communicated down through the hierarchy.

Management Model

A theoretical framework or tool that outlines the strategies, practices, and procedures used to manage an organization effectively.

General Guidelines

Broad and nonspecific instructions or rules designed to guide actions or behavior in various situations.

Defender Organization

A type of business strategy where a company focuses on protecting its existing market share by emphasizing product improvement and innovation within a narrow market scope.