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Contributions Received by NFPs May Be Restricted

question 10

Essay

Contributions received by NFPs may be restricted. Funds can be received in the form of endowment contributions and contributions that are externally restricted by the donor or internally restricted by the board.
Required:
Explain the differences between endowment contributions and contributions that are externally restricted by the donor or internally restricted by the board. Discuss the accounting treatment for each type of restricted contribution if the NFP uses the deferral method of reporting.


Definitions:

Directive Leader

A leadership style characterized by providing clear, specific commands and expecting compliance from subordinates.

Group Members

Individuals who belong to a shared collective, such as a team, organization, or social group, contributing to common goals.

Morale

The confidence, enthusiasm, and discipline of a person or group at a particular time, especially in a work context.

Contingency Leadership

A theory of leadership that suggests the effectiveness of a particular style of leadership is contingent upon the context and situation at hand.

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