The Xavier Family Contributed $300,000 to a Local University to Establish

question 35

Multiple Choice

The Xavier family contributed $300,000 to a local university to establish a scholarship fund in the name of their late mother. Scholarships will be provided from the fund earnings. This is BEST described as which kind of contribution?

• A)Endowment contribution.
• B)Internally restricted contribution.
• C)Externally restricted contribution.
• D)Unrestricted contribution.

---

Definitions:

Expense Accounts

Accounts used to record all expenditures incurred by a business during an accounting period, excluding costs of goods sold.

Debits

An accounting entry that results in either an increase in assets or a decrease in liabilities on a company's balance sheet or in an expense on the income statement.

Debt Ratio

A financial ratio that compares the amount of debt a company has to its total assets.

Risk

The potential for loss or the chance that an investment's actual return will differ from the expected outcome.