If the entity received a donated asset the entity must:
A) recognise an asset.
B) recognise a liability.
C) recognise an income.
D) recognise expense.
E) recognises an asset and an income.

Question

Quizplus · Accepted Answer

When an entity receives a donated asset, it must recognize the asset as well as the fair value of the asset received as income. This is because the asset has increased the entity's economic resources, and therefore the entity recognizes the asset on the balance sheet and the fair value of the asset received as income on the income statement.

If the Entity Received a Donated Asset the Entity Must