A government is the recipient of a bequest of a multi-story office building that the government intends to sell to support program activities. The building has a historical cost of $850,000, a book value in the hands of the benefactor of $700,000, and a fair value of $1,050,000. The city had not yet begun to try to sell the building when its annual financial statements were issued. The city should recognize on its governmental fund financial statements, donations revenue of
A) $-0-.
B) $700,000.
C) $850,000.
D) $1,050,000.

Question

Quizplus · Accepted Answer

In governmental fund financial statements, donations are recognized as revenue when they are available and measurable. Since the building has not yet been sold, the revenue is not available, so no revenue is recognized.

A Government Is the Recipient of a Bequest of a Multi-Story