Kayla made a $150,000 contribution to the Gilliam Society, a not-for-profit organization. Kayla stipulated that his contribution is to be used for the organization's special events program in the next year. How should Gilliam record the contribution at the time of contribution?

Question

Quizplus · Accepted Answer

The contribution should be recorded as a deferred contribution because it is restricted for use in the organization's special events program next year. The organization cannot recognize the contribution as revenue until it has fulfilled the restriction, which is providing the special events program. Therefore, the contribution should be recorded as a liability (deferred contribution) until the restriction is fulfilled.

Kayla Made a $150,000 Contribution to the Gilliam Society, a Not-For-Profit