Prepare the Necessary Journal Entries to Record These Transactions Assuming

question 15

Essay

Prepare the necessary journal entries to record these transactions assuming that the restricted fund method of accounting for contributions is used and the organization has a general fund, a capital fund and an endowment fund.

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Definitions:

Industry

A sector of the economy that includes businesses and organizations that produce similar goods or services.

Economic Costs

The sum of explicit and implicit costs which represent the total opportunity costs of resource utilization in the production of goods or services.

Opportunity Costs

The loss of potential gain from other alternatives when one alternative is chosen.

Explicit Costs

Direct, out-of-pocket payments for expenses incurred in conducting business, such as wages, rent, and materials.