Which of the following statements regarding fund accounting is FALSE?
A)Not for profit organizations must use the restricted fund method to record contributions.
B)Under the deferral method, restricted contributions are recorded as revenue in the same period as the related expense is recorded.
C)Under the restricted fund method, the not-for-profit organization creates, at least, a general fund and an endowment fund.
D)Under the restricted fund method, contributions to the restricted funds are considered revenues to those funds. Unrestricted contributions are revenues to the general fund.

Question

Quizplus · Accepted Answer

Not-for-profit organizations can use either the restricted fund method or the deferral method to record contributions. The restricted fund method involves creating separate funds for specific purposes, while the deferral method records restricted contributions as liabilities until the related expenses are incurred.

Which of the Following Statements Regarding Fund Accounting Is FALSE