A Generous Benefactor Pledges $1 Million to the R

question 40

Essay

A generous benefactor pledges $1 million to The R. J. Smith Foundation, a not-for-profit entity that promotes the arts. The gift is to be used to provide scholarships for talented musicians at a music camp operated by the Foundation. The gift was given in August 2013 to support the Summer 2014 music program. The foundation director argues that the gift is a conditional restricted gift and therefore cannot be recognized as revenue in 2013. The accountant argues that the gift is an unconditional restricted gift and must be recognized in the current year. What is the basis for the director's argument? What is the basis for the accountant's argument? In your answer provide an explanation of the terms conditional, unconditional, restricted and unrestricted.

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Definitions:

Eighteenth-Century

The period from 1701 to 1800, marking the 18th century in the Gregorian calendar.

Liberalism

A political and moral philosophy that emphasizes individual freedom, democracy, and equal rights, advocating for government policies that protect personal liberties.

Checks and Balances

A foundational principle in the constitution of many democratic countries, designed to ensure that no single branch of government becomes too powerful, by providing each branch with powers to check the others.

Republicanism

A political ideology centered on citizenship in a state organized as a republic under which the people hold popular sovereignty.