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 cash contribution from donor who stipulated the contribution be permanently invested.
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

The transaction is not reported on the statement of operations because it is a permanently restricted contribution, which is recorded directly in the net assets section of the balance sheet.

The Transactions Listed in the Following Questions Occurred in a Private