A donation of cash is recorded as a debit to which account?

• A. Debit cash $1,000
• B. Credit cash $1,000
• C. Debit donations revenue $1,000
• D. Credit donor liability $1,000

Answer: (A)

When cash is received, your assets go up. Cash is an asset, and increases to assets are recorded with a debit. So the correct recording is a debit to cash for the donated amount. The other side of the entry would usually be a credit to donations revenue (or to donor-restricted net assets if the gift has restrictions). Debiting the Donations Revenue account would not reflect an increase in assets and is not how revenue is normally increased (revenue goes up with credits). Crediting cash would decrease cash, which is opposite of a cash receipt, and crediting a donor liability would imply you owe something to the donor, which isn’t the typical treatment for a straightforward donation.