Commerce Exam > Commerce Questions > Normally the principal portion of an endowmen...
Start Learning for Free
Normally the principal portion of an endowment will be classified as _________________ net assets.
- a)Temporarily restricted
- b)Unrestricted
- c)Permanently restricted
- d)None
Correct answer is option 'C'. Can you explain this answer?
| FREE This question is part of | Download PDF Attempt this Test |
Most Upvoted Answer
Normally the principal portion of an endowment will be classified as _...
Explanation:
Endowment refers to the funds or assets donated to a nonprofit organization with the purpose of providing long-term financial support. Endowment funds are invested to generate income that can be used to support the organization's operations or specific programs. The principal portion of an endowment is the original amount donated, and it is classified as permanently restricted net assets.
Permanently restricted net assets:
Permanently restricted net assets are funds that have been donated to an organization with the restriction that they cannot be used for any other purpose than what the donor has specified. The principal portion of an endowment is considered permanently restricted because it cannot be spent, and only the investment income generated by the principal can be used to support the organization's operations.
Unrestricted and Temporarily restricted net assets:
Unrestricted net assets are funds that are not subject to any donor restrictions and can be used for any purpose that the organization deems necessary. Temporarily restricted net assets are funds that have been donated with the restriction that they can only be used for a specific purpose or time frame. Once the restriction is met, the funds become unrestricted.
In conclusion, the principal portion of an endowment is classified as permanently restricted net assets because it cannot be spent, and only the investment income generated by the principal can be used to support the organization's operations.
Endowment refers to the funds or assets donated to a nonprofit organization with the purpose of providing long-term financial support. Endowment funds are invested to generate income that can be used to support the organization's operations or specific programs. The principal portion of an endowment is the original amount donated, and it is classified as permanently restricted net assets.
Permanently restricted net assets:
Permanently restricted net assets are funds that have been donated to an organization with the restriction that they cannot be used for any other purpose than what the donor has specified. The principal portion of an endowment is considered permanently restricted because it cannot be spent, and only the investment income generated by the principal can be used to support the organization's operations.
Unrestricted and Temporarily restricted net assets:
Unrestricted net assets are funds that are not subject to any donor restrictions and can be used for any purpose that the organization deems necessary. Temporarily restricted net assets are funds that have been donated with the restriction that they can only be used for a specific purpose or time frame. Once the restriction is met, the funds become unrestricted.
In conclusion, the principal portion of an endowment is classified as permanently restricted net assets because it cannot be spent, and only the investment income generated by the principal can be used to support the organization's operations.
Attention Commerce Students!
To make sure you are not studying endlessly, EduRev has designed Commerce study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in Commerce.
|
Explore Courses for Commerce exam
|
|
Similar Commerce Doubts
Top Courses for CommerceView all
Normally the principal portion of an endowment will be classified as _________________ net assets.a)Temporarily restricted b)Unrestricted c)Permanently restrictedd)NoneCorrect answer is option 'C'. Can you explain this answer?
Question Description
Normally the principal portion of an endowment will be classified as _________________ net assets.a)Temporarily restricted b)Unrestricted c)Permanently restrictedd)NoneCorrect answer is option 'C'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Normally the principal portion of an endowment will be classified as _________________ net assets.a)Temporarily restricted b)Unrestricted c)Permanently restrictedd)NoneCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Normally the principal portion of an endowment will be classified as _________________ net assets.a)Temporarily restricted b)Unrestricted c)Permanently restrictedd)NoneCorrect answer is option 'C'. Can you explain this answer?.
Normally the principal portion of an endowment will be classified as _________________ net assets.a)Temporarily restricted b)Unrestricted c)Permanently restrictedd)NoneCorrect answer is option 'C'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Normally the principal portion of an endowment will be classified as _________________ net assets.a)Temporarily restricted b)Unrestricted c)Permanently restrictedd)NoneCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Normally the principal portion of an endowment will be classified as _________________ net assets.a)Temporarily restricted b)Unrestricted c)Permanently restrictedd)NoneCorrect answer is option 'C'. Can you explain this answer?.
Solutions for Normally the principal portion of an endowment will be classified as _________________ net assets.a)Temporarily restricted b)Unrestricted c)Permanently restrictedd)NoneCorrect answer is option 'C'. Can you explain this answer? in English & in Hindi are available as part of our courses for Commerce.
Download more important topics, notes, lectures and mock test series for Commerce Exam by signing up for free.
Here you can find the meaning of Normally the principal portion of an endowment will be classified as _________________ net assets.a)Temporarily restricted b)Unrestricted c)Permanently restrictedd)NoneCorrect answer is option 'C'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
Normally the principal portion of an endowment will be classified as _________________ net assets.a)Temporarily restricted b)Unrestricted c)Permanently restrictedd)NoneCorrect answer is option 'C'. Can you explain this answer?, a detailed solution for Normally the principal portion of an endowment will be classified as _________________ net assets.a)Temporarily restricted b)Unrestricted c)Permanently restrictedd)NoneCorrect answer is option 'C'. Can you explain this answer? has been provided alongside types of Normally the principal portion of an endowment will be classified as _________________ net assets.a)Temporarily restricted b)Unrestricted c)Permanently restrictedd)NoneCorrect answer is option 'C'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice Normally the principal portion of an endowment will be classified as _________________ net assets.a)Temporarily restricted b)Unrestricted c)Permanently restrictedd)NoneCorrect answer is option 'C'. Can you explain this answer? tests, examples and also practice Commerce tests.
|
|
Explore Courses for Commerce exam
|
|
Suggested Free Tests
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup