Individual Assignment Week 5

Individual Assignment Week 5 - 7. 2. A not-for-profit...

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1. Individual Assignment: Ch. 12 Textbook Exercises 1 and 2 2. 1. Provide examples of resources that are temporarily restricted as to: (a) purpose; (b) time; and (c) the occurrence of a specific event. Provide an example of permanently restricted resources. 3. Temporarily restricted:purpose include: those used for acquisition of plant and equipment, or used for research. 4. temporarily restricted:time include: term endowments from which only income is available for expenditure during a specified period of time. 5. temporarily restricted occurrence of a specific event include: annuities , which are gifts that provide the donor with income until his or her death. 6. An example of permanently restricted resources are endowments, which can be a sum of cash, investment , or other form of assets that are received as a gift, of which only the income can be expended.
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Unformatted text preview: 7. 2. A not-for-profit organization receives a restricted gift. When, and in which type of fund, should it recognize the revenue? When, and in which type of fund, should it recognize the related expense? What is the reason for the apparent inconsistency between the fund types in which the revenues and expenses are reported? 8. The revenue should be recognized in a temporarily restricted fund in the period when it is received. The related expense should be recognized in the current operating fund when the restriction is met or expired. The reason for the inconsistency between the fund types is due to the restricted nature of the gift, and that the expenditure of the resource is often not recognized in the same accounting period. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32....
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Individual Assignment Week 5 - 7. 2. A not-for-profit...

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