How should a nongovernmental, not-for-profit organization report donor-restricted cash contributions for long-term-purposes in its statement of cash flows? a. Financing activity inflow. b. As a noncash transaction. c. Operating activity inflow. d. Investing activity inflow.

Question

Hailey Rodgers

Business

18 June, 19:05

How should a nongovernmental, not-for-profit organization report donor-restricted cash contributions for long-term-purposes in its statement of cash flows? a. Financing activity inflow. b. As a noncash transaction. c. Operating activity inflow. d. Investing activity inflow.

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Answers (1)

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Miley Foster · Answer 1

a. Financing activity inflow

Explanation:

As the donor pledge for an specifit contribution over a period of time longer than a year it is financing the organization. The organization cannot report it as as operating activity as it doesn't have full control over were to spend the cash.

The donation will be a principal and the organization will use the interest of the donation to support their activities.