The current fair value of contributed material is recognized in a nonprofit organization's unrestricted fund with a debit to Inventories and a credit to:

Question

Quizplus · Accepted Answer

The correct answer is D) Contributions Revenues. When a nonprofit organization receives contributed materials, the fair value of those materials is recognized as revenue in the unrestricted fund. The entry to record this transaction would be a debit to Inventories (to recognize the asset received) and a credit to Contributions Revenues (to recognize the increase in revenue). This reflects the contribution as support to the organization without any donor-imposed restrictions.

The Current Fair Value of Contributed Material Is Recognized in a Nonprofit