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Lane College Foundation is governed by a board, some members of which are appointed by the President of Lane College and some of which are elected by the alumni.It was created to solicit and accept donations on behalf of Lane College, a private not-for-profit college.Lane College and its Foundation are deemed to be financially interrelated.All funds collected by the Foundation must be used to support activities of Lane College.The Foundation Board can select which activities of Lane College it supports.Lane Foundation received a $1 million bequest from the estate of a 1940 graduate.
-At the time the Foundation receives the donation, Lane College should debit Asset $1 million and Credit what account for $1 million?
A)Unrestricted revenue.
B)Temporarily restricted revenue.
C)Liability.
D)No entry should be made by Lane College.

Question

Use the following information for Questions 
Lane College Foundation is governed by a board, some members of which are appointed by the President of Lane College and some of which are elected by the alumni.It was created to solicit and accept donations on behalf of Lane College, a private not-for-profit college.Lane College and its Foundation are deemed to be financially interrelated.All funds collected by the Foundation must be used to support activities of Lane College.The Foundation Board can select which activities of Lane College it supports.Lane Foundation received a $1 million bequest from the estate of a 1940 graduate.
-At the time the Foundation receives the donation, Lane College should debit Asset $1 million and Credit what account for $1 million?
A)Unrestricted revenue.
B)Temporarily restricted revenue.
C)Liability.
D)No entry should be made by Lane College.

Quizplus · Accepted Answer

The $1 million bequest is a type of donation that is considered temporarily restricted until the Foundation Board designates how it will be used to support Lane College. Therefore, Lane College should credit temporarily restricted revenue for $1 million.

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