A Firm Received an Asset as a Donation from a Shareholder

question 179

Multiple Choice

A firm received an asset as a donation from a shareholder. However, the shareholder imposed a condition to be met before title transfers to the firm. The firm will be unable to meet the condition during the current fiscal year. How should the firm account for this donated asset?

• A) Debit a liability
• B) No recognition is necessary until the condition is met
• C) Credit revenue
• D) Credit a liability

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Definitions:

Implicit Leadership Perspective

A theory suggesting that people have preconceived notions or prototypes of what leadership qualities look like, which influence their evaluation of who is considered a leader.

Leadership Substitute

An approach or factor that makes the leadership style unnecessary or redundant due to its presence, promoting independence in teams.

Self-Leadership Competencies

Refers to the set of skills and behaviors that individuals use to guide their own performance and development proactively.

Situational Leadership Model

A theory suggesting that the most effective leadership style varies depending on the maturity and capability of the followers as well as the complexity of the task.