Final answer:
Prepaid assets are assets that are paid for in advance but have not yet been used or consumed. When prepaid assets are used, they are recorded as expenses. The total net assets with donor restrictions released due to these prepaid assets is $534. Therefore, the correct answer to the question is (a) $534.
Step-by-step explanation:
Prepaid assets are assets that are paid for in advance but have not yet been used or consumed. In this case, $534 of prepaid assets were used.
When prepaid assets are used, they are no longer considered assets because they have been consumed, instead, they are recorded as expenses. In other words, the $534 of prepaid assets that were used would result in a decrease in net assets.
Therefore, the correct answer to the question is (a) $534. This is because the prepaid assets were used and became expenses, resulting in a decrease of $534 in net assets with donor restrictions. Therefore, the correct answer to the question is (a) $534.