Do-Good Inc. is a newly formed not-for-profit organization. On January 1, 2012, its first day of operations, 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 a restricted fund contribution of $8,400. In which fund would the purchase and amortization of the asset be recorded?

Question

Quizplus · Accepted Answer

The purchase and amortization of the asset would be recorded in the Capital Fund, as it is used to account for the acquisition and depreciation of fixed assets.