A voluntary health and welfare organization would report the account Provision for Uncollectible Pledges as which of the following?

Question

Quizplus · Accepted Answer

The Provision for Uncollectible Pledges is a type of bad debt expense that is incurred when a nonprofit organization expects that some portion of its pledged contributions will not be collected. It is reported as an expense on the income statement and reduces the revenue recognized from the pledges. This account is not a contra asset or contra revenue account. While management does have some discretion in estimating this provision, it must be reported as an expense.

A Voluntary Health and Welfare Organization Would Report the Account