A Private, Not-For-Profit Hospital Received a Contribution of $40,000 on June

question 111

Multiple Choice

A private, not-for-profit hospital received a contribution of $40,000 on June 15, 20X8. The donor restricted the contribution to funding research activities currently being performed by the hospital. For the year ended December 31, 20X8, the hospital spent $30,000 of the contribution on research activities. The hospital expended the remaining $10,000 on research activities in January of 20X9.
-Refer to the above information.On the statement of operations prepared for the year ended December 31,20X8,the events described would:

• A) increase operating income by $30,000.
• B) have no effect on operating income.
• C) increase unrestricted net assets by $30,000.
• D) decrease unrestricted net assets by $30,000.

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Definitions:

Major Pronouncement

An important statement or decision made by a regulatory authority or standard-setting body, significantly affecting accounting practices and policies.

Due Process

A principle that ensures every individual receives a fair and impartial treatment within the judicial system, also applicable in regulatory frameworks to ensure transparency and fairness.

Public-Hearing Stage

A phase in the legislative or regulatory process where stakeholders can give their input on proposed measures, often through formal presentations.

Exposure-Draft Stage

A phase in the standard-setting process where a proposed accounting standard is made public for feedback before it becomes final.