On the statement of activities for a private,not-for-profit literary society,expenses decrease which of the following classes of net assets?
I.temporarily restricted net assets
II.unrestricted net assets
A) I only
B) II only
C) Either I or II
D) Neither I nor II

Question

Quizplus · Accepted Answer

Expenses decrease unrestricted net assets because they are not subject to any restrictions. Temporarily restricted net assets are restricted by donors or other external factors, so expenses do not affect them directly.

On the Statement of Activities for a Private,not-For-Profit Literary Society,expenses