Question :
The amount received as donation by a not-for-profit organisation under the will of a decreased person is termed as:
Option 1: Legacy
Option 2: Endowment Fund
Option 3: Specific donation
Option 4: Honorarium
Answer (1)
23rd Jan, 2024
Correct Answer: Legacy
Solution : The property acquired by virtue of a person's will or after his death is considered a legacy. Since it is a capital receipt, it won't be recorded in the income and expense account and instead will be added to capital on the balance sheet. Due to the fact that it is a one-time item, it needs to be capitalised. Hence, the correct option is 1.
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