With respect to the endowment fund, which of the following statements is TRUE?
A)Endowment contributions are recognized as a direct increase to net assets under the deferral method and as revenue to the endowment fund under the restricted fund method.
B)Endowment contributions are treated the same way under both the deferral method and the restricted fund method.
C)Endowment contributions are recognized as revenue under the deferral method and as revenue in a restricted fund under the restricted fund method.
D)Endowment contributions are recognized as revenue under the deferral method and as a direct increase to net assets under the restricted fund method.

Question

Quizplus · Accepted Answer

The correct statement is that endowment contributions are recognized as a direct increase to net assets under the deferral method and as revenue to the endowment fund under the restricted fund method. This is because the endowment fund is a restricted fund, meaning that contributions to it must be recognized as revenue in the fund. Under the deferral method, contributions are recognized as a direct increase to net assets because they are not recognized as revenue until earnings on the investment are distributed to the beneficiary.

With Respect to the Endowment Fund, Which of the Following