A not-for-profit university uses fund accounting.The university's governing board decides to set aside $500,000 in a separate fund called the Student Performance Quasi-Endowment Fund,the income of which will be used to finance a long-term study on the career paths of the university's graduates.In which net asset classification of the university's statement of financial position should this fund be reported?

Question

Quizplus · Accepted Answer

The fund is classified as unrestricted because it is a quasi-endowment fund, meaning the governing board has the authority to decide how the funds are used, including the possibility of spending the fund itself, not just the income it generates. This flexibility differentiates it from true endowment funds, which are typically restricted by donor stipulations.

A Not-For-Profit University Uses Fund Accounting