A wealthy citizen provided in her will for a gift of cash and other assets to Balsa City. The will specified that the gift was to be kept intact and that the earnings from the gift were to be used to support public parks. At the time of the donation, the gift had a book value in the hands of the donor of $300,000 and a fair value of $500,000. When recording this gift the city would credit

Question

Quizplus · Accepted Answer

The correct answer is A) Contributions revenues $500,000. This is because in governmental accounting, contributions are recorded at their fair value at the time of the donation. In this case, the fair value of the gift is $500,000, so the city would credit Contributions revenues for that amount.

A Wealthy Citizen Provided in Her Will for a Gift