On June 30,20X9,a voluntary health and welfare organization received pledges from donors amounting to $50,000.The donors did not place any time or use restrictions on the amount pledged.It was estimated that 10 percent of the pledges would not be collected.How should the voluntary health and welfare organization report these pledges on its financial statements prepared at the end of its fiscal year,June 30,20X9?

Question

Quizplus · Accepted Answer

The organization should report the pledges as contribution revenue-unrestricted for $45,000 because it is estimated that 10% of the pledges ($5,000) will not be collected. Since there are no time or use restrictions on the pledges, they should be reported as unrestricted revenue. Reporting the pledges as fund balance or fund balance unrestricted would not be accurate as they represent assets or net assets rather than revenue.

On June 30,20X9,a Voluntary Health and Welfare Organization Received Pledges