D is corrent. Nongovernmental not-for-profit organizations are required to report a statement of cash flows. On this statement, cash flows are reported using the classifications of operating, investing, and financing activities. Cash flows related to revenues and expenses which are unrestricted should be reported in the operating activities section. The cash inflows from both tuition ($500,000) and the unrestricted contribution ($100,000) are both unrestricted and should be reported as operating activities. Restricted contributions for long-term purposes, like the $300,000 endowment, are reported as financing activities on the statement of cash flows.
A is incorrect because unrestricted cash flows should be reported as operating activities.
B is incorrect because unrestricted cash flows should be reported as operating activities.
A is incorrect because unrestricted cash flows should be reported as operating activities.
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