Which of the Following Should Be Accounted for in a Permanent

question 1

Multiple Choice

Which of the following should be accounted for in a permanent fund?

• A) A gift of $1,000,000 to a city, to be invested permanently, with the proceeds to be used to maintain the city war memorials.
• B) A gift of $100,000 to a school board, to be given out $10,000 a year to the class valedictorian as a college scholarship.
• C) A gift of $100,000 to a city, to be expended next year to purchase books for the city library.
• D) A gift of $1,000,000 to a city, to be invested permanently, with the proceeds to be used to distribute to one or more nonprofit groups.

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Definitions:

Balance Due

The outstanding amount of money owed by a debtor to a creditor, which remains unpaid after any initial payments or deductions have been applied.

Current Lease

An active leasing agreement specifying the terms under which a lessee occupies or utilizes the leased asset.

Evaluation

The systematic assessment of the value, performance, or quality of a plan or entity.

Straight-line Depreciation

A technique for distributing the expense of a physical asset uniformly throughout its estimated useful duration.