Which of the following would be reported as an Asset with Restrictions on Use?

• A. A cash contribution for a new building
• B. Endowment restricted for income
• C. A cash contribution restricted for future programming
• D. A grant restricted to purchase equipment

Answer: (A)

The main idea is that an Asset with Restrictions on Use is a resource donated or granted to be used for a specific, designated purpose. A cash contribution designated for a new building fits this exactly: the funds must be used for constructing the building and cannot be spent on anything else, so they are recorded as a restricted asset meant for that capital project.

Endowment restricted for income uses the asset differently—the restriction applies to the earnings generated by the endowment, not to the use of the principal itself. So it isn’t classified as an Asset with Restrictions on Use in the same sense.

A cash contribution restricted for future programming is also restricted for a purpose, but the most straightforward and commonly emphasized example of a use-restricted asset is funds tied to a capital project like a building. A grant restricted to purchase equipment involves restricting a future expenditure to acquire equipment, which is a related but distinct treatment and often handled differently in practice until the asset is actually purchased.