1. KUC has just completed its annual fund-raising drive. It received $1,750,000 of pledges. $750,000 was paid to KUC either in cash or by credit card. KUC sent invoices to the remaining donors. From past experience, KUC knows that 15% of these pledges will never be received. How would KUC record this transaction?
2. KUC’s policy is to write off any uncollected pledges from prior years campaigns at the completion of the next year’s annual appeal. At the end of this year’s campaign, there was $275,000 worth of uncollected pledges from last year’s appeal. How would KUC record this in its accounts?
3. Which of the following conditions must be met before revenue is recognized?
a) goods and/or services must be delivered to the customer
b) the amount to be collected must be objectively measurable
c) the customer must be happy with the service
d) there can be no possibility that the customer will not pay the bill