Which statement about restricted resources is true?

Which statement about restricted resources is true?

• A. They are limited to specific purposes by donors or grant terms
• B. They can be used for any district purpose
• C. They refer only to cash on hand
• D. They are interchangeable with unrestricted resources

Answer: (C)

Restricted resources are funds whose use is limited by donors or grant terms. In the context of this item, the statement that they refer only to cash on hand is the true one because donor-restricted funds are typically held as cash that must be kept or spent for a designated purpose and aren’t available for general district operations. This sets them apart from unrestricted resources, which can be used for any district purpose, and from the idea that restricted resources can be swapped with unrestricted resources. While some settings may involve restrictions on noncash assets, this question frames restricted resources primarily as restricted cash.

Restricted resources are funds whose use is limited by donors or grant terms. In the context of this item, the statement that they refer only to cash on hand is the true one because donor-restricted funds are typically held as cash that must be kept or spent for a designated purpose and aren’t available for general district operations. This sets them apart from unrestricted resources, which can be used for any district purpose, and from the idea that restricted resources can be swapped with unrestricted resources. While some settings may involve restrictions on noncash assets, this question frames restricted resources primarily as restricted cash.