The transactions listed in the following questions occurred in a private, not-for-profit hospital during 20X8. For each transaction, indicate its effect on the hospital's statement of operations for the year ended December 31, 20X8.
Transaction: Received contributions restricted by donors for equipment acquisition.
Effect on Statement of Operations:
A) Increases operating income.
B) Decreases operating income.
C) The transaction is reported on the statement of operations, but there is no effect on operating income.
D) The transaction is not reported on the statement of operations.

Question

Quizplus · Accepted Answer

Contributions restricted for equipment acquisition are not reported on the statement of operations; they are recorded as increases in net assets with donor restrictions until used for the intended purpose.

The Transactions Listed in the Following Questions Occurred in a Private