Net Assets: Net assets in nonprofit accounting is of three categories: unrestricted, temporarily restricted and permanently restricted. Nonprofits uses the unrestricted net assets for day to day operations. When nonprofit organizations such as public or private universities receive funds to spend on certain pre-specified future they are recognized as temporarily restricted net assets. And the permanently restricted net asset consists of endowments and other funds that are supposed to be kept in perpetuity, but the income generated from such assets can be used unrestrictedly. To choose: Select the best option.

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Chapter 19, Problem 19.1.7P

To determine

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Net Assets:

Net assets in nonprofit accounting is of three categories: unrestricted, temporarily restricted and permanently restricted. Nonprofits uses the unrestricted net assets for day to day operations. When nonprofit organizations such as public or private universities receive funds to spend on certain pre-specified future they are recognized as temporarily restricted net assets. And the permanently restricted net asset consists of endowments and other funds that are supposed to be kept in perpetuity, but the income generated from such assets can be used unrestrictedly.

To choose: Select the best option.

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