The Nature Conservatory, a Not-For-Profit Entity, Engaged in a Fundraising

question 36

Multiple Choice

The Nature Conservatory, a not-for-profit entity, engaged in a fundraising drive to raise money to buy land to provide a habitat for the endangered Sleepy Eagle.A donor pledged $1 million to the project provided that the Nature Conservatory was able to raise an additional $1.5 million from other sources.What entry should the Nature Conservatory make at the time of the $1 million pledge?

• A)Debit Pledge Receivable $1 million; Credit Unrestricted Revenue $1 million.
• B)Debit Pledges Receivable $1 million; Credit Temporarily Restricted Revenue $1 million.
• C)Debit Pledges Receivable $1 million; Credit Temporarily Restricted Net Assets $1 million.
• D)No entry is made at the time of the pledge.

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Definitions:

Cost of Goods Sold

The total cost associated with making or buying the goods that a company has sold during a particular period.

Journal Entry

A record in accounting that notes the debit and credit transactions affecting the financial statements.

Interim Financial Report

A financial statement reported for a period shorter than the fiscal year, typically quarterly, providing an update on a company's financial performance and position.

Required Disclosure

Information that companies are legally obliged to provide to stakeholders, such as financial statements and material facts, to ensure transparency.