When expenses are recognized for a transaction and the not-for-profit possess funds restricted for transactions of that type, it is assumed that ______________.

Question

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According to the general rule of accounting for not-for-profit organizations, when expenses are recognized for a transaction and the organization has funds restricted for that transaction's purpose, it refers to the restriction placed on the donor's gift. Therefore, funds restricted for that purpose are used first before utilizing any other unrestricted or permanently restricted funds.

When Expenses Are Recognized for a Transaction and the Not-For-Profit