An alumnus donates securities to a private college and stipulates that the principal be held in perpetuity and income from the securities be used for faculty travel. Dividends received from the securities should be recognized as increases in:

Question

Quizplus · Accepted Answer

The donation is restricted to be used for faculty travel, therefore, the dividends received from the securities should be recognized as increases in net assets with donor restrictions. The principal being held in perpetuity also indicates a restriction on the use of the donated funds.

An Alumnus Donates Securities to a Private College and Stipulates