In this lesson, Nick Palazzolo, CPA, demystifies the accounting for items donated to not-for-profit organizations. He illustrates how to record these contributions at their fair value using clear journal entry examples, such as when a truck is donated. Nick explains the difference between assets intended for the organization's use and those meant for immediate distribution, like meal kits at a homeless shelter, and how this determines the appropriate accounting treatment. He also covers what happens when donated items are sold at a value greater than what was initially recorded, clarifying that any excess is considered an additional contribution instead of a gain—offering insight into the unique financial reporting scenarios faced by not-for-profits.
This video and the rest on this topic are available with any paid plan.
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