If you think that the only income you need to record comes from sales, you might be wrong. A donation can be income, too.
I will qualify this by saying that non-profit entities often have different rules, so if you are a non-profit this may not apply.
Otherwise, a donation is income, even if the donation is equipment, it should be recorded at the fair market value on the date of donation.
To record the donation:
* Create a seperate income account
* Call it Donation Income
* You can also just use the Other Income account
* Enter something in the memo block as a reminder.
Then the value of the donation is debited to an asset account (cash, equipment, inventory, etc) and credited to the Donation or Other Income account.
To complete this:
* Bring up inventory adjust
* Mark it as a value adjustment
* Select donation income as the adjusting account
* Increase the quantity of the item
* Increase the total value of the item.
This gives the item a cost and the income account shows that same cost as income to the business.
In general, a donation is free and clear of ownership and the person donating has no claim to business equity. If the donation is tied to a claim on ownership of some part of the business then you need to set up an equity account for the person that is donating (they are really investing not donating) and credit the equity account instead of income. Remember: always check any accounting methods presented with your accountant or financial advisor.