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A $36,000 cash gift was received by a college during the year. In which fund should the gift be recorded if there were no restrictions on the use of the cash? In which fund should the gift be recorded if the donor specified that the cash was to be used to replace obsolete and damaged equipment?

User Cooow
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1 Answer

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Answer: Temporary Restricted Fund

Step-by-step explanation:

A temporary restricted fund is a type of fund that not-for-profits like colleges have that include cash that was donated to them for a specific purpose. It is also time-bound and therefore has to be used by a certain date.

When the money has been used to do what the donor intended for it to be for or if the time elapses, the account can become unrestricted.

In this case the college got the money to replace obsolete and damaged equipment so the money will be temporarily restricted.

User Nick Parker
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