What is the correct procedure for handling a cash donation received at the counter?

• A. Record as revenue per policy, segregate from general revenue if required, issue a receipt, and post to the appropriate fund.
• B. Deposit directly to the bank without recording.
• C. Treat as petty cash.
• D. Ignore if small.

Answer: (A)

Handling a cash donation at the counter hinges on proper accounting and donor stewardship. The correct approach is to record the donation as revenue according to policy, segregate it from general revenue if required (to respect any donor-imposed restrictions), issue a receipt to the donor, and post the amount to the appropriate fund. This sequence ensures the money is traceable, respects donor intent, and appears correctly in financial reports. It also provides a formal acknowledgment for the donor and a clear audit trail for governance.

Depositing cash without recording creates no traceable record and violates standard accounting practices. Treating donations as petty cash misclassifies funds that are intended for a specific purpose or general revenue, leading to misstatements. Ignoring a donation, even if small, fails to honor donor intent and leaves missing funds in the records.