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 an unrestricted contribution of $8,000. In which fund would the purchase of the asset be recorded?

Question

Quizplus · Accepted Answer

The purchase of the equipment would be recorded in the Capital Fund, as it involves the acquisition of a capital asset.