Ronwell Gates Donated $200,000 to Conway University and Specified That

question 14

Multiple Choice

Ronwell Gates donated $200,000 to Conway University and specified that the principal amount not be spent but be maintained permanently. Interest on the invested funds can be used to award scholarships to those who excel in theoretical physics. How should the $200,000 contribution be presented on Conway University's financial statements?

• A)As revenue of the endowment fund.
• B)As a direct increase in net assets of the endowment fund.
• C)As revenue of the operating fund.
• D)As deferred revenue of the operating fund.

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Definitions:

Cost of Goods Purchased

The total expense incurred in buying goods for sale, including any additional costs necessary to get them into a saleable state.

Goods Purchased

Items bought by a business for the purpose of resale, production, or as part of its services.

Beginning Inventory

The value of goods available for sale at the start of an accounting period, serving as an important factor in calculating cost of goods sold.

Cost of Goods Sold

The total cost of materials and labor directly tied to the production of goods sold by a company during a specific period.