Mr Generous Donated $100,000 to Excel Private School and Specified

question 29

Multiple Choice

Mr. Generous donated $100,000 to Excel Private School 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 drama. How should the $100,000 contribution be presented on Excel Private School's financial statements?

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

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Definitions:

Break-Even Lease Payment

The lease payment amount at which the cost of leasing equals the cost of purchasing the asset.

Financing Rate

The interest rate charged by lenders for borrowing money or the cost of obtaining finance.

CCA Class

In the context of tax regulations, CCA Class (Capital Cost Allowance Class) pertains to categories defined by tax authorities for depreciating tangible property over its useful life for tax purposes.

Net Advantage to Leasing

The benefit that arises from leasing an asset rather than purchasing it, considering factors like tax advantages and cash flow.