Good Care Hospital,which is operated by a religious organization,received contributions of $1,000,000 from donors who stipulated that the cash be used to construct an addition to the hospital.As of the balance sheet date,none of the contributions had been expended for construction.On the hospital's balance sheet,the cash contributions would be disclosed in which of the following classes of net assets?

Question

Quizplus · Accepted Answer

The cash contributions are restricted by the donors for a specific purpose (construction of an addition to the hospital), but the hospital has not yet spent the funds for that purpose. Therefore, these funds are considered temporarily restricted until they are used for the intended purpose, at which point they will be reclassified as unrestricted net assets.

Good Care Hospital,which Is Operated by a Religious Organization,received Contributions