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A not-for-profit organization receives a restricted gift. When, and in which type of fund, should it recognize the revenue? When, and in which type of fund, should it recognize the related expense? What is the reason for the apparent inconsistency between the fund types in which the revenues and expenses are reported?

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When the gift is received, it is reported in assets and as revenue in the endowment account (or name of the restricted balance account). When the expenditure is made, as permitted by the restriction, the expense is reported in the operating fund. ...

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Carol Sargent, PhD
Education
  • BSc, University of Virginia
  • MSc, University of Virginia
  • PhD, Georgia State University
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