In the current year,the not-for-profit organization (NFP)How to Read Government Financial Reports received both cash of $1,000 and pledges of $2,000 to be used for teaching citizens how to read government financial reports.During the year the organization spent $1,500 teaching citizens to read financial statements.Assuming the NFP has a policy of spending its restricted resources first,in the current year what amount of contributions can be reclassified as unrestricted?

Question

Quizplus · Accepted Answer

The NFP has a policy of spending its restricted resources first. Therefore, the $1,000 in cash received specifically for teaching citizens how to read government financial reports would be considered restricted funds and would be spent first. Since the organization spent $1,500 teaching citizens to read financial statements, there would be $500 left of the restricted funds. Any pledges received would also be considered restricted until they are fulfilled. Therefore, none of the $2,000 in pledges can be reclassified as unrestricted. Therefore, the only amount that can be reclassified as unrestricted would be the remaining $1,000 in cash contributions.

In the Current Year,the Not-For-Profit Organization (NFP)How to Read Government