The Turtle Island Singers receive three gifts during the year 2012: (a)$3,000,which may be used for any purpose at any time; (b)$5,000,which must be used for a special concert in a nursing home;and (c)$1,000,which may be used for any purpose,but only in the year 2013.When it receives the gifts,how should the entity classify them:

Question

Quizplus · Accepted Answer

The $3,000 gift can be used for any purpose at any time, so it should be classified as unrestricted revenue. The $5,000 gift has a restriction that it must be used for a special concert in a nursing home, so it should be classified as temporarily restricted revenue. The $1,000 gift can only be used in the year 2013, but it has no other restrictions, so it should also be classified as temporarily restricted revenue. Therefore, the best choice is to classify $3,000 as unrestricted revenue and $6,000 as temporarily restricted revenue.

The Turtle Island Singers Receive Three Gifts During the Year