The equity section of the Statement of Net Assets of a private not-for-profit hospital may contain which of the following descriptions?

Question

Quizplus · Accepted Answer

Private not-for-profit hospitals typically have various categories of net assets that are described in the equity section of the Statement of Net Assets. The three main categories are permanently restricted, temporarily restricted, and unrestricted net assets. Permanently restricted net assets are those that the hospital must maintain in perpetuity, with the income generated from them used for specific purposes as designated by the donor. Temporarily restricted net assets are those that the hospital must use for specific purposes or time frames as designated by the donor, after which they become unrestricted net assets. Unrestricted net assets are those that can be used for any purpose the hospital deems appropriate. Other categories such as nonspendable, committed and assigned are typically used in governmental accounting and not applicable to private not-for-profit hospitals. The descriptions in choice A and D are not commonly used categories in the equity section of a private not-for-profit hospital's financial statements.

The Equity Section of the Statement of Net Assets of a Private