A contribution was received by the city for the purchase of playground equipment. The contribution would not be recognized as revenue by the permanent fund until the playground equipment has been purchased.

Question

Quizplus · Accepted Answer

The contribution should be recognized as revenue in the period it is received by the permanent fund, not when the playground equipment is purchased. Revenue recognition does not depend on the timing of the purchase of assets it is intended to fund.

A Contribution Was Received by the City for the Purchase