Any donation received for a specific purpose is a_________?
Correct answer: D. Capital receipts
- A. Liability
- B. Assets
- C. Revenue receipts
- D. Capital receipts
Explanation
A donation restricted to a specific purpose is not freely available for ordinary operations and is treated as a capital receipt or restricted fund. It is therefore classified separately from revenue receipts.
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About Accounting Principles
Accounting principles explain the rules used to record, classify and report business transactions. Coverage includes the accounting equation, double-entry system, accrual and cash bases, matching and prudence concepts, consistency, going concern, business entity, and the difference between capital and revenue items.
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