If a not-for-profit organization uses the restricted fund method of reporting and has a capital fund, how should a donation of cash restricted to the purchase of land be reported?

Question

Quizplus · Accepted Answer

When a not-for-profit organization receives a donation of cash specifically restricted for the purchase of land, and it uses the restricted fund method of reporting, the donation should be reported as revenue in the capital fund. This is because the capital fund is used to track resources that are restricted for capital purposes, such as purchasing land.

If a Not-For-Profit Organization Uses the Restricted Fund Method of Reporting