A government university received a cash donation $1,000,000 to create an endowment. The income of the endowment can be used to support any activity of the university. In the balance sheet, the $1,000,000 endowment should be included in which component of net position?

Question

Quizplus · Accepted Answer

The $1,000,000 endowment should be included in the "Restricted - nonexpendable net position" because the principal amount of the endowment is not expendable by the university, but the income generated from it can be used for the university's activities. This classification reflects the restriction on the principal amount while allowing for the use of the income.

A Government University Received a Cash Donation $1,000,000 to Create