Do-Good Inc. is a not-for-profit organization that was formed on January 1, 2020. Do-Good has a December 31 year end. It has an accounting policy of capitalizing and amortizing its capital assets. On April 1, 2020, Do-Good purchased equipment costing $8,000. The equipment is estimated to have a useful life of 4 years, with no residual value at that time. This transaction was the only transaction that took place to date. The equipment was purchased from an unrestricted contribution of $8,000.
In which fund would the receipt of the unrestricted contribution be recorded?

Question

Quizplus · Accepted Answer

The receipt of the unrestricted contribution would be recorded in the general fund, as it is not restricted for a specific purpose or project.