Jordan made a $100,000 contribution to the Appo Society,a not-for-profit organization.Jordan stipulated that his contribution is to be used for the organization's breakfast program in the next year.How should Appo 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 to a specific program and cannot be used for other purposes until the next year. Therefore, it does not meet the criteria for recognition as contribution revenue in accordance with Generally Accepted Accounting Principles (GAAP). Once the breakfast program is carried out, the deferred contribution can be recognized as revenue in the financial statements.

Jordan Made a $100,000 Contribution to the Appo Society,a Not-For-Profit