A nonprofit university uses fund accounting. The university's governing board decides to set aside $500,000 in a separate fund called the Student Performance Quasi-Endowment Fund, the income of which will be used to finance a long-term study on the career paths of the university's graduates. In which net asset classification of the university's statement of financial position would the net assets in this fund be reported?

Question

Quizplus · Accepted Answer

Board-designated endowment funds are funds set aside by the governing board for lengthy but unspecified periods of time. Because they are not donor restricted, they are classified as net assets without donor restrictions for financial reporting purposes, often with an additional description as board-designated.

A Nonprofit University Uses Fund Accounting