A Donor Made a Cash Contribution of $75,000 to a Private

question 12

Multiple Choice

A donor made a cash contribution of $75,000 to a private college for the purpose of acquiring a building.The private college properly recorded the gift of cash as a temporarily restricted revenue.When the building is acquired,the college should:

• A) Record the building as unrestricted.
• B) Show an expense equivalent to the amount paid for the building in unrestricted net assets and reclassify the same amount from temporarily restricted to unrestricted net assets.
• C) Record the plant as either unrestricted or temporarily restricted, as long as a consistent policy is followed.
• D) Record the building as permanently restricted.

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Definitions:

Sum Of Squared Deviations

The total of the squared differences between each observation and the mean of the data set, used in statistical analysis to measure variability.

Sum Of Squares For Error

A measure used in statistical analysis to quantify the discrepancy between observed and expected values, summing the squares of these deviations.

Direct Relationship

A relationship between two variables in which they move in the same direction, meaning as one variable increases, the other also increases.

Independent Variable

A variable presumed to influence or cause changes in another variable, referred to as the dependent variable.