Under FASB, a large cash contribution intended for the acquisition of a new building would be reported on the statement of cash flows as:

• A. Financing activity.
• B. Operating activity.
• C. Investing activity.
• D. Noncash financing activity.

Answer: (A)

In this scenario, the key idea is how not-for-profit cash flows classify donor-restricted contributions for capital acquisitions. When a large cash contribution is specifically set aside for buying a new building, that inflow is treated as financing activities because it provides resources for a long-term asset, not for day-to-day operations. The actual purchase of the building would then show up under investing activities as cash outlays for acquiring long-term assets. If the contribution were unrestricted for current operations, it would be in operating activities; if it were noncash, it would be a noncash financing item.