Dieter won a lottery and made a $500,000 endowment contribution to his alma mater to provide scholarships. Under the deferral method, in the year of contribution, the university should recognize the contribution as which of the following?
A)Unrestricted revenue.
B)An increase to net assets.
C)Restricted revenue.
D)Deferred revenue.

Question

Quizplus · Accepted Answer

An endowment contribution is recognized as an increase to net assets because it represents a donation that increases the university's overall financial position. It is not considered restricted, deferred, or unrestricted revenue in the context of the deferral method for this type of contribution.

Dieter Won a Lottery and Made a $500,000 Endowment Contribution