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:

Debit Column

A column in financial ledgers where debits are recorded, typically indicating increases in assets or expenses or decreases in liabilities, equity, and income.

Credit Column

Refers to the right side of a ledger account where entries serve to increase liabilities, revenues, or equity and decrease assets or expenses.

Accounting Cycle

The collective process of recording and processing the accounting events of a company, from when the transaction occurs, to its inclusion in the financial statements.

Financial Statements

Consolidated documents presenting the financial status, performance, and cash flows of a company, primarily comprising the balance sheet, income statement, and statement of cash flows.