How Is an Unconditional Pledge to Contribute to a Private

question 113

Multiple Choice

How is an unconditional pledge to contribute to a private not-for-profit organization recorded?

• A) As revenue when pledged.
• B) Not recorded until received.
• C) As unearned revenue.
• D) None of the above.

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Definitions:

Capital Markets

Financial markets in which long-term debt or equity-backed securities are bought and sold, serving as a platform for raising capital.

Long-Term Bonds

Bonds that are due for payment or redemption at a date more than ten years in the future, often offering a higher yield due to the increased risk.

Stocks

Shares of ownership in a company, giving shareholders a claim on the company’s earnings and assets.

Sarbanes-Oxley Act

A law passed by U.S. Congress in 2002 aimed at protecting investors from fraudulent financial reporting by corporations.