Question

Indicate how the following contributed service would be recorded by a private, non-profit organization:

A member of the accounting faculty at the local university (specializing in taxes) donates his time to teach senior citizens how to fill out their tax returns. Last year the senior center hired a CPA for the program.

The contribution is not recorded.

The contribution is recorded as revenue with an equal amount recorded as expense.

The contribution is recorded as revenue with an equal amount recorded as “other financing uses.”

The contribution is recorded as an asset with an equal amount recorded as expense.

The contribution is recorded as an asset with an equal amount recorded as contribution revenue.

Answer 1

Since this task require specialised skills which otherwise will be purchased by the center as done in last year , this will be recorded as revenue and expense with the same amoiam.

Answer is option B