Which entry would be the correct entry on the not-for-profit organization's books to record a donor's gift when the money is simply passing through the not-for-profit organization and creates no direct benefit, and when control of the assets has been relinquished by the donor?

Question

Quizplus · Accepted Answer

Option C, "Credit Cash and Debit Contributions Receivable," is the correct entry for recording a donor's gift when the money is passing through the not-for-profit organization and creates no direct benefit, and control of the assets has been relinquished by the donor. This is because the organization has not yet received the funds in cash and is therefore recording it as a receivable, and the credit to Cash will be recorded at a later point when the funds are actually received. The other options either debit an expense account or credit a revenue account, which is inappropriate for a simple passing-through transaction.

Which Entry Would Be the Correct Entry on the Not-For-Profit