A Private College Received an Offer from a CPA Who

question 87

Multiple Choice

A private college received an offer from a CPA who is an alumnus to teach a one-semester advanced accounting course at no cost.FASB 116 prescribes that this contribution of service:

• A)need only be disclosed in the footnotes to the financial statements.
• B)be recorded as an asset with an equivalent amount recorded in the unrestricted fund balance.
• C)be recorded as a revenue with an equivalent amount recorded as an expenditure.
• D)need not be recorded if the service is for a period less than one academic year.

---

Definitions:

Deindividuation

A psychological state in which an individual adopts a group identity, losing personal responsibility and inhibitions, often leading to impulsive and deviant behavior.

Abhorring

A feeling of repulsion or strong dislike towards something.

Mood Linkage

The phenomenon where individuals tend to share and synchronize their emotional states with others.

Informational Social Influence

The influence to accept information from others as evidence about reality, often leading to conformity.