A donor gave $60,000 to a nongovernmental, not-for-profit charity with instructions that the funds be transferred to Sam Smith, an individual who lost his home in a fire. The not-for-profit would:

A. Record the $60,000 cash and credit temporarily restricted revenue.
B. Record the $60,000 cash and credit a liability.
C. Do either of the above, depending upon the policy of the not-for-profit.
D. Not record the transaction, because the money is going directly to the intended recipient.


Answer: B

Business

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