Which entry would be the correct entry to record that a not-for-profit entity collected $80,000 of amounts pledged and also wrote off $3,000 of amounts pledged that were previously estimated as amounts uncollectible? DEBIT CREDIT
A) Pledges Receivable $80,000 Cash $80,000
B) Cash $80,000 Pledges Receivable $80,000
C) Pledges Receivable $80,000 Allowance for uncollectible pledges 3,000 Cash $83,000
D) Cash $80,000 Pledges Receivable $83,000 Allowance for uncollectible
Pledges $3,000
E) Cash $80,000 Unrestricted net assets-contributions $83,000 Allowance for uncollectible
Pledges $3,000

Question

Quizplus · Accepted Answer

The correct entry would be to debit Cash for the amount collected ($80,000) and credit Pledges Receivable for the same amount. Additionally, the entity would need to write off the estimated amount of uncollectible pledges, which would be a credit to Allowance for uncollectible Pledges and a debit to Pledges Receivable ($3,000). Therefore, the correct entry would be to credit Allowance for uncollectible Pledges for $3,000, debit Pledges Receivable for $3,000, and credit Pledges Receivable for $80,000. Finally, the entity would need to recognize the net amount collected by debiting Pledges Receivable for $83,000 and crediting Cash for $80,000 and Allowance for uncollectible Pledges for $3,000. Option D represents the correct entry.

Which Entry Would Be the Correct Entry to Record That