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A nonprofit university uses fund accounting. The university's governing board decides to set aside $500,000 in a separate fund called the Student Performance Quasi-Endowment Fund, the income of which will be used to finance a long-term study on the career paths of the university's graduates. In which net asset classification of the university's statement of financial position would the net assets in this fund be reported?
A. Net assets without donor restrictions-board-designated for research
B. Net assets without donor restrictions-board-restricted for research
C. Net assets with board designations
D. Endowment funds

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eooyibo123

Answer:

A. Net assets without donor restrictions-board-designated for research

Explanation:

The accounting system of non profit organisations classifies net assets as those with with donor restrictions and those without donor restrictions.

The assets with donor restrictions are set aside internally by the nonprofit organisation for a particular purpose. That is board designated activity for example in the given scenario funds will finance a long-term study on the career paths of the university's graduates.

So in this instance the net asset is without donor restrictions-board-designated for research activities

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