The Helping Hands organization asks a local CPA firm to contribute audit services to audit their annual financial report. The CPA firm contributes the audit services to the organization and normally would have billed $1,500 for this audit. The CPA firm also solicits volunteers from among its employees to plant flowers in the landscaping in front of the Helping Hands building one Saturday. The flowers donated cost $300 and the employees worked for 12 hours (their average pay rate would normally be $30/hour at the CPA firm). What type of contributions are these? What should Helping Hands record to account for those contributions?

Obviously the $1500 contribution of services would be recognized as contributed services; the related accounts involved would be an expense account and unrestricted contribution revenue on Helping Hands books.

Since the CPA firm is soliciting volunteers for a skill that is not specialized, I would assume that no accounting entry would be justified. The cost of the flowers, $300, could be considered a gift (no entry) or could be considered building improvements (depreciation entry) or possibly even a gift or charitable donation unrestricted.

What are the characteristics of a Not For Profit? How do they differ from Government?

Not for Profit (NFPs), have several characteristics including: revenues received from providers who do not expect a financial or economic benefit in return, operating purposes are other than making a profit, and defined ownership interest are absent. In contrast to governments, they do not have an election, power to enact tax levies, or potential for dissolution by government with assets reverting to government.

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