In 2014,a private college received a grant of $100,000 with purpose restrictions. In 2015 funds were expended for the purpose outlined in the gift; however,it was not possible to determine whether the restricted funds or unrestricted funds were used. The presumption should be:

Question

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The presumption should be that the restricted funds would be used first, as this is the standard practice in accounting for restricted funds. This ensures that the restrictions are followed and that the funds are used for their intended purpose.

In 2014,a Private College Received a Grant of $100,000 with Purpose