Which entry would be the correct entry to record pledges of $100,000 to a public television fundraiser? The public television organization estimates that 5% of the funds will be uncollectible.

Question

Quizplus · Accepted Answer

Option C is the correct entry to record pledges of $100,000 to a public television fundraiser. The entry debits Pledges Receivable for the full amount of $100,000, credits unrestricted net assets-contributions for the amount expected to be collected ($95,000), and credits allowance for uncollectible pledges for the amount expected to be uncollectible ($5,000). This entry reflects the estimate of 5% of the funds being uncollectible.

Option A is incorrect because it does not account for the estimated uncollectible amount and overstates the contributions made.

Option B is incorrect because it assumes that all the pledges are collected immediately, which is not the case.

Option D is incorrect because it debits the allowance for uncollectible pledges, which is a contra account, thereby overstating the potential amount of uncollectible pledges.

Option E is incorrect because it assumes that some cash has been received, which is not the case.

Which Entry Would Be the Correct Entry to Record Pledges