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