A voluntary welfare organization is permitted to use building facilities rent free.This should be recorded as:

Question

Quizplus · Accepted Answer

The correct answer is D because the use of building facilities rent-free should be recorded as a contribution (reflecting the value of the benefit received) and also as rent expense at the fair market value, to accurately reflect the cost if the organization had to rent the facilities on the open market. This approach ensures that the financial statements accurately reflect the value of the support received and the hypothetical cost of the facilities, providing a complete picture of the organization's financial situation.

A Voluntary Welfare Organization Is Permitted to Use Building Facilities