When a city donor donates a building to the city, what amount should be recorded for this donated property in the General Fund?

• A. $0
• B. $300,000
• C. $600,000
• D. $50,000

Answer: (A)

The key idea is that donated capital assets are not recorded in the General Fund. In governmental accounting, the General Fund shows financial resources (cash, receivables, etc.) available for spending, not capital assets. A donated building is a noncash asset that will be recognized in the government-wide financial statements at fair value, with a corresponding increase in net position (donor contribution or capital asset). The General Fund, however, does not record the asset or revenue for such a donation, so there is no financial resource or asset to report in that fund. Therefore, the amount recorded in the General Fund is zero. In the government-wide statements, the building would appear as a capital asset with related donor contribution, and depreciation would be reported there, not in the General Fund.