How Should That Portion of Investment Income Earned from the Investment

question 35

Multiple Choice

How should that portion of investment income earned from the investment of endowment contributions that is required to be used to maintain the purchasing power of the endowment be accounted for if the not-for-profit organization uses the restricted fund method of reporting and has an endowment fund?

• A) As investment income in the general fund.
• B) As investment income in the endowment fund.
• C) As a direct increase in net assets in the general fund.
• D) As a direct increase in net assets in the endowment fund.

---

Definitions:

Fourteenth Amendment

An amendment to the US Constitution granting citizenship to all persons born or naturalized in the United States and ensuring equal protection under the laws.

Bill of Rights

The initial ten adjustments to the U.S. Constitution, ensuring fundamental liberties and rights for the people of America.

Eminent Domain

The power of the government or its agent to seize private property for public use, with compensation to the owner.

Public Purposes

Activities or projects undertaken by the government for the benefit and welfare of the general public.