A not-for-profit organization receives a restricted contribution of $20,000 to be used for a specific project. During the current year, $14,000 is spent toward the project with the balance to be spent next year. How much donation revenue should the not-for-profit organization recognize in the current year, if the organization uses the restricted fund method for reporting and had a fund for this project?

Question

Quizplus · Accepted Answer

Under the restricted fund method, the entire amount of the restricted contribution ($20,000) is recognized as revenue in the year it is received, regardless of when the funds are spent.

A Not-For-Profit Organization Receives a Restricted Contribution of $20,000 to Be