A Local Philanthropist Made an Unconditional Pledge to Donate $100,000

question 61

Multiple Choice

A local philanthropist made an unconditional pledge to donate $100,000 to a not-for-profit organization to be paid in five equal installments of $20,000 beginning in two years. Under FASB standards the pledge would be recognized as:

• A) A contribution of $20,000 in each of the five years a contribution is made.
• B) A contribution of $100,000 in the year the pledge is made, adjusted for the estimated uncollectible amount.
• C) Deferred support of $100,000 in the year the pledge was made.
• D) A contribution of $100,000 in the year the pledge was made, discounted for the difference between the pledge and its present value.

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Definitions:

Disposable Personal Income

The total income households have after taxes and other deductions, available for spending, saving, or investment.

Non-tax Payments

Fees or charges paid to the government that are not considered taxes, such as fines, licenses, or charges for public services.

Noncorporate Businesses

Businesses that are not incorporated and typically include sole proprietorships, partnerships, and family-owned entities.

Imports

Goods or services brought into one country from another for the purpose of trade.