A donor gave $60,000 to a nongovernmental, not-for-profit charity with instructions that the funds be transferred to Sam Smith, an individual who lost his home in a fire. The not-for-profit would:

Question

Quizplus · Accepted Answer

Generally, if the not-for-profit organization agrees to transfer the assets to a specified beneficiary, the organization is deemed to be an agent and a liability is recorded. The journal entry would be to debit cash and credit a liability.

A Donor Gave $60,000 to a Nongovernmental, Not-For-Profit Charity with Instructions