A Donor Agrees to Contribute $5,000 Per Year at the End

question 68

Multiple Choice

A donor agrees to contribute $5,000 per year at the end of each of the next five years to a voluntary health and welfare organization. The donor did not place any use restrictions on the amount pledged. The stream of the payments is discounted at 6 percent. The first payment of $5,000 is received at the end of the first year. The present value factor for a five-payment annuity due on June 30, 20X9, at 6 percent is 4.2124.
Based on the preceding information, the journal entry to recognize present value at the time the pledge is received includes:

• A) a credit to Pledges Receivable-Temporarily Restricted for $25,000.
• B) a debit to Contributions-Temporarily Restricted for $21,062.
• C) a debit to Pledges Receivable-Temporarily Restricted for $21,062.
• D) a credit to Contributions-Temporarily Restricted for $25,000.

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Definitions:

Prospect's Past Sales

Historical sales data of a potential client or customer, analyzed to understand buying patterns, preferences, and potential for future transactions.

Undifferentiated Selling

A marketing approach where a product or service is offered to the market without any modification or customization to meet varied customer needs.

Account Segmentation

The process of dividing customer accounts into distinct groups based on characteristics like size, needs, or purchasing behavior to tailor marketing and sales efforts.

Sales Call Allocation

The process of distributing or assigning sales calls or visits among sales team members based on criteria like territory, specialization, or workload.