Which of the Following Is Part of the Treatment of Multi-Year

question 65

Multiple Choice

Which of the following is part of the treatment of multi-year pledges as required by FASB Statement No.116?

• A) The donation is recorded as a receivable at the present value of the future collections but revenue is not recorded until the pledge is received.
• B) At the end of each accounting period, the difference between the balance in the receivable account and the new present value is recorded as contribution revenue and the receivable is increased.
• C) At the end of each accounting period, the difference between the balance in the receivable account and the new present value is deducted from the amount of the amount received from the donor which is recorded as income.
• D) Pledge receivable is recorded for the total amount to be received and revenue is recorded each year as monies are received by the organization.

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Definitions:

Logical Conclusions

The final step in a reasoning process, based on the logical combination of facts, observations, or premises.

Abstract Terms

Words or phrases that represent ideas or concepts that are not tangible or concrete.

Cephalocaudal

A principle of human growth and development where development proceeds from the head downwards through the body.

Proximodistal

A pattern of growth and development in children where development proceeds from the body's central axis outward to the extremities.