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:

Operating Expenses

The costs associated with the day-to-day operations of a business, excluding costs related to production.

Depreciation

Depreciation is the accounting process of allocating the cost of a tangible asset over its useful life, reflecting its decrease in value over time.

Income Taxes

Taxes levied by the government on individuals or corporations based on their net income or profit.

Value Of Dollar

The purchasing power of the U.S. dollar, influenced by factors such as inflation, interest rates, and economic conditions.