Which of the Following Would Be a Contribution Increasing Permanently

question 106

Multiple Choice

Which of the following would be a contribution increasing permanently restricted net assets?

• A) A contribution by a donor in the amount of $1,000,000, set aside by the governing board as funds not to be expended.
• B) A contribution by a donor in the amount of $1,000,000 to be used to acquire land.
• C) Both A & B above.
• D) Neither A nor B above

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Definitions:

Novation

The act of replacing one obligation with a new one, extinguishing the original obligation.

Ratification

Ratification is the formal approval or confirmation of an action or agreement, often used in the context of treaties, contracts, or laws.

Promoters

Individuals or companies responsible for establishing a corporation or business venture, including raising capital and completing legal formalities.

Personal Liability

involves an individual's legal responsibility for debts or obligations, potentially affecting personal assets.