Note: This is a Kaplan CPA Review Question
Gray College, a private not-for-profit institution, received a contribution of $100,000 for faculty research. The donation was received in 20X1 and $80,000 was spent in 20X1. As a result of these transactions, Gray College should report on its 20X1 statement of activities a:
A) $100,000 increase in temporarily restricted net assets.
B) $20,000 increase in temporarily restricted net assets.
C) $80,000 increase in temporarily restricted net assets.
D) $100,000 increase in unrestricted net assets.

Question

Quizplus · Accepted Answer

The $100,000 contribution is initially recorded as an increase in temporarily restricted net assets. When $80,000 is spent, it is released from restriction, leaving a $20,000 increase in temporarily restricted net assets.

Note: This Is a Kaplan CPA Review Question