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. What will the net asset balance in the restricted fund be at the end of the 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 net asset balance in the restricted fund at the end of the year would be the remaining amount of the contribution that has not yet been spent. Since $14,000 has been spent, the remaining balance is $6,000.

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