In the statement of activities, FASB Statement No.117 requires revenues to be reported as increases in one of the three categories of net assets, depending on donor-imposed restrictions; however, all expenses should be reported as decreases in unrestricted net assets.

Question

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According to FASB Statement No. 117, revenues should be reported as increases in one of the three categories of net assets (unrestricted, temporarily restricted, or permanently restricted) depending on donor-imposed restrictions. However, all expenses should be reported as decreases in unrestricted net assets.

In the Statement of Activities, FASB Statement No