Final answer:
A CPA volunteered to collect cash for the Farm's fund-raising event would most likely be recorded as contribution revenue and salary expense because it meets the criteria established by the FASB for recording donated services.
Step-by-step explanation:
The correct answer is A) A CPA volunteered to collect cash for the Farm's fund-raising event. According to the Financial Accounting Standards Board (FASB), donated services can only be recorded as contribution revenue and salary expense if the services require specialized skills that the organization would otherwise need to pay for. In this case, a CPA volunteering to collect cash for the fund-raising event is providing specialized skills that the organization would typically pay for if they had to hire someone. Therefore, this would be recorded as both contribution revenue and salary expense.
In contrast, the other options do not meet the criteria for recording donated services. The executive director helping with the harvest on several Saturdays is already a salaried employee, so this would not be recorded as a salary expense. The local senior citizens serving as greeters are not providing specialized skills that the organization would typically need to pay for, so this would not be recorded as a salary expense either. Finally, the lawyer representing the Farm in a legal dispute is providing legal services, but this is not a specialized skill that the organization would typically need to pay for, as lawyers are typically hired for legal matters.
Donated legal services provided by a lawyer to Second Chance Farm meet the FASB criteria for recording as contribution revenue and salary expense, as legal services are specialized skills and often need to be purchased if not donated.
The student asked which situation would most likely be recorded as contribution revenue and salary expense due to donated services according to the FASB criteria. Among the options provided, the scenario where a lawyer represented Second Chance Farm in a legal dispute with a vendor most closely meets the Financial Accounting Standards Board (FASB) criteria for recognizing donated services. These criteria specify that the services should (1) create or enhance nonfinancial assets, or (2) require specialized skills, are provided by individuals possessing those skills, and typically need to be purchased if not provided by donation. In this case, legal services provided by a lawyer would generally be considered specialized and something the organization would have to purchase if not donated.