Land was donated to a government for use in a general government activity. The land should be reported in

Question

Quizplus · Accepted Answer

Under generally accepted accounting principles (GAAP), when land is donated to a government, it should be recorded in the General Capital Assets accounts at its fair value on the date it was donated. This amount becomes the government's "cost" for the land for accounting purposes, and any subsequent changes in the land's value (up or down) would be reflected in the government's financial statements. Option A is incorrect because the land should be reported in the Capital Assets accounts, not the General Fund. Option B is incorrect because the land's value should be recorded at its fair value when donated, not at cost incurred by the donor. Option D is incorrect because the Capital Projects Fund is used for capital expenditures that create a depreciable asset, whereas land is not depreciable.

Land Was Donated to a Government for Use in a General