A not-for-profit organization receives $3,400,000 of pledges in its annual telethon.When should the organization recognize contribution revenue?

Question

Quizplus · Accepted Answer

According to accounting standards, not-for-profit organizations should recognize contribution revenue when the pledges are received, less an allowance for uncollectible pledges, as this represents the most accurate estimation of the revenue earned. Option A is incorrect as it does not take into account uncollectible pledges. Option B is incorrect as it does not consider the form of pledges. Option D is incorrect as it does not account for any restrictions placed on the pledges.

A Not-For-Profit Organization Receives $3,400,000 of Pledges in Its Annual