Which of the Following Statements Is Correct

question 30

Multiple Choice

Which of the following statements is correct?

• A) Endowments are donations that are received with the provision that it will be invested and only the investment income may be spent by the organization.
• B) Endowments are unrestricted donations which can be used for any purposes that are consistent with the goals and objectives of the not-for-profit organization.
• C) Endowments are provided as donations which only allow a not-for-profit organization to invest in other not-for-profit organizations only.
• D) Endowments may be restricted and unrestricted funds which must be used in accordance with the wishes of the contributor and only available during the life of the donor.

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Definitions:

Carrying Value

The book value of an asset or liability on a balance sheet, representing the cost minus accumulated depreciation or amortization.

Investments in Bonds

Financial investments made by purchasing debt securities issued by corporations, governments, or other entities that pay interest over a specific period.

Time Value of Money

The concept that money available at the present time is worth more than the same amount in the future due to its potential earning capacity.

Face Value

The original value of a financial instrument as stated on the instrument itself.