Create a journal entry with likely account names from a typical nonprofit organi

ID: 2410192 • Letter: C

Question

Create a journal entry with likely account names from a typical nonprofit organization's chart of accounts and the dollar amounts to be debited and credited. If no journal entry is required, please indicate so.

1. A wealthy citizen gave $175,000 to a local not-for-profit organization (NFP) with the restriction that only it could be spent at the discretion of the officers of the NFP but not until next year.

2. A nurse anestheticist from a religious order that has taken a vow of poverty works full-time for a not-for-profit hospital without receiving a paycheck. A typcial nurse's salary for this type of work is $110,000 per year.

1. A wealthy citizen gave $175,000 to a local not-for-profit organization (NFP) with the restriction that only it could be spent at the discretion of the officers of the NFP but not until next year.

Explanation / Answer

Journal Entries in the books of Non Profit Organisation:

1) As the organoisation is receiving amount from a wealthy citizen, it is treated as donation to the Organisation. The restriction kept by the donor is a paper rule, it can't be passed as a journal entry.

Cash a/c Dr $175,000

To Donation a/c $175,000

(Being donation received for the Organisation)

2) Actually the payment for the same type work is $110,000 per year, but this nurse has taken a vow and not accepting any payment from the Organisation. So there is no payment for her and there is no need to pass journal entry.

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Create a journal entry with likely account names from a typical nonprofit organi

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Create a journal entry with likely account names from a typical nonprofit organi

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