Advanced Accounting 10th Edition by Thomas Schaefer, Joe Ben Hoyle, Timothy Doupnik

Exercise 24

Theresa Johnson does volunteer work for a local not-for-profit organization as a community service.She replaces without charge an administrator who would have etherwise been paid $31,000.Which of the following statements is true
a.The organization should recognize a restricted gain of $31,000.
b.The organization should recognize a contribution of $31,000 as an increase in unrestricted net assets as well as salary expense of $31,000.
c.The organization should recognize a reduction in expenses of $31,000.
d.The organization should make no entry.