Question

A not-for-profit organization received a donation temporarily restricted as to use. Thedonated amount was later spent in accordance with the restriction. In which category(ies) of netassets should the related revenues and expenses be recognized?Unrestricted:_______Temporary: Restricted:______

Answer 1

Answer:

the correct answer to the following question is - Unrestricted - Expenses, and Temporary restricted - Revenues.

Explanation:

NPO ( Not for profit organization ) is that type of organization which can be formed by charities , cooperatives or other voluntary organizations, for the purpose of serving the public service objective or any other educational or professional objective. Here the trustees of these organizations don't expect a repayment on the investment that they have made in the NPO . When a NPO receives donations which are temporary to use , there expenses would be coming under unrestricted category of net assets and revenues would come under Temporary restricted category of net assets.