Question

Which of the following terms is used to indicate that a donor provided a gift with explicit instructions that the gift is to be used for a specific purpose by the not-for-profit but the entire amount may be spent right away A. Board-designated net assets

B. Permanently restricted net assets

C. Endowment assets

D. Temporarily restricted net assets.

Answer 1

The term used here is temporarily restricted net assets.

Answer: Option D.

Step-by-step explanation:

Temporarily restricted net assets are the assets that are given to the non profit organisation by the donors of those organisation. They are known as temporary restricted because there are certain restriction on the use of those gifts.

These gifts can be used only for a specific purpose by the organisation. But these restrictions can be removed after a certain time period has been passed. That is why the restriction is temporary.