Question

Home Away, a nongovernmental not-for-profit organization, provides food and shelter to victims of natural disasters. Home Away received a $15,000 gift with the stipulation that the funds be used to buy beds. In which net asset class should Home Away report the contribution?

Answer 1

Answer:

Home away should record the contribution to a Net assets with donor restriction

Step-by-step explanation

A Net asset with donor restriction is the part of net assets of a not- for - profit making organisation  that is subject to donor-imposed restrictions.  

The stipulation that the fund of $15,000 should be used to buy beds automatically makes it to be classified as a Net assets with donor restriction  item.