Under the Deferral Method, How Should Contributions Received in the Current

question 32

Multiple Choice

Under the deferral method, how should contributions received in the current year, but restricted for operating expenses for one or more future periods, be reported in the current year?

• A)As deferred revenue on the balance sheet
• B)As revenue in the statement of operations
• C)As a direct increase to net assets
• D)As a reduction of operating expenses on the statement of operations

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Definitions:

Output

The total amount of goods or services produced by a company, system, or economic process.

Marginal Product

The additional output that is produced by using one more unit of a particular input, ceteris paribus.

Fertilizer

A substance used to enhance the growth of plants and increase yield by supplying essential nutrients.

Bushels

A unit of volume that is used for quantities of dry commodities (such as grains or produce), where the capacity varies according to the commodity.