A not-for-profit entity receives equipment having a fair value of $50,000 as a gift.How should the gift be reported in the entity's financial statements?

Question

Quizplus · Accepted Answer

The gift of equipment should be recognized as an asset in the entity's financial statements, and since it has no restrictions on its use, it should be reported as an increase in unrestricted net assets. Options A and D are not appropriate because the gift does not have any donor-imposed restrictions. Option C is not correct because significant gifts or donations should be reported on the face of the financial statements.

A Not-For-Profit Entity Receives Equipment Having a Fair Value of $50,000