Henry Highbrow promises to donate $25,000 to his church toward the purchase of a new piano if the church is able to raise matching funds of $25,000 from other contributors. At what point should the church record revenue?

Question

Quizplus · Accepted Answer

Revenue should be recognized when the matching funds are raised, as the condition for Henry's donation has been met. Until then, the revenue should be classified as a pledge or a contingent liability. Only when the matching funds are raised does the revenue become unconditional, and therefore, revenue should be recognized at that point.

Henry Highbrow Promises to Donate $25,000 to His Church Toward