In accordance with ASC 958,pledges,which are temporarily restricted by donors,are reported as increases in net assets with donor restrictions on the statement of activities of a voluntary health and welfare organization when the:
A)pledges are received in cash.
B)cash received from the pledges is expended in accordance with the donors' wishes.
C)pledges are made by the donors.
D)cash is received from the pledges is transferred to net assets without donor restrictions.

Question

Quizplus · Accepted Answer

Under ASC 958, pledges that are temporarily restricted by donors are recognized as increases in net assets with donor restrictions when the pledges are made, not when the cash is received or expended. This is because the promise to give (the pledge) itself establishes the restriction, and accounting standards require recognition of the revenue at the time the pledge is made, assuming it is unconditional.

In Accordance with ASC 958,pledges,which Are Temporarily Restricted by Donors,are