A Donor Had Previously Donated $2,000 to a Not-For-Profit Entity,stipulating

question 14

Multiple Choice

A donor had previously donated $2,000 to a not-for-profit entity,stipulating that the gift must be used to finance the annual Fall Harvest festival.The festival is held and the gift is used for the stipulated purpose.Which of the following best describes the effect of the journal entries needed to record the expense resulting from use of the gift?

• A)An expense is reported in the temporarily restricted column of the statement of activities.
• B)An expense is reported in the temporarily restricted column of the statement of activities,temporarily restricted net assets are increased,and unrestricted net assets are decreased.
• C)An expense is reported in the unrestricted column of the statement of activities.
• D)An expense is reported in the unrestricted column of the statement of activities,unrestricted net assets are increased,and temporarily restricted net assets are decreased.

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Definitions:

Intragroup Sales

Intragroup sales involve transactions of goods or services between companies within the same corporate group, impacting consolidated financial statements.

Non-controlling Interest

A shareholder's equity in a portion of a subsidiary that is not owned, directly or indirectly, by the company which owns more than half of the subsidiary.

Consolidated Group

A group of companies composed of a parent and its subsidiaries, whose financial statements are prepared as one entity.

Equity

The value of shares issued by a company, representing ownership interest held by shareholders.