A private,not-for-profit hospital received contributions of $50,000 from donors on June 15,2009.The donors stipulated that their contributions be used to purchase equipment for the hospital.As of June 30,2009,the end of the hospital's fiscal year,$12,000 of the contributions had been spent on equipment acquisitions.In the hospital's general fund,what account would be credited to recognize the release of the restrictions on the temporarily restricted contributions used to acquire equipment?

Question

Quizplus · Accepted Answer

The net assets released from restriction account is used to recognize the release of restrictions on temporarily restricted contributions when they have been used for their intended purpose. In this case, the donors stipulated that their contributions be used to purchase equipment for the hospital, and $12,000 of the contributions had already been spent on equipment acquisitions by the end of the fiscal year. Therefore, the remaining $38,000 of temporarily restricted contributions would be released from restriction and credited to the net assets released from equipment acquisition restriction account. Choices A, B, and D are not appropriate because they do not accurately reflect the nature of the transaction.

A Private,not-For-Profit Hospital Received Contributions of $50,000 from Donors on June