The governing board of a hospital operated by a religious organization designated $3,000,000 of cash to be used for plant expansion.The cash was invested in stocks and bonds which earned $250,000 of dividend and interest income.The income from investments should be reported on the hospital's statement of operations as an increase in:

Question

Quizplus · Accepted Answer

The income from investments should be reported as operating income as it is related to the hospital's ongoing operations and not restricted to a specific purpose or donor. Option A is incorrect as the funds were not designated as donor-restricted. Option C may seem plausible, but since the question states that the funds were not designated as restricted, the income cannot be reported as such. Option D is incorrect as the hospital operated by a religious organization would typically not have a general fund.

The Governing Board of a Hospital Operated by a Religious