Rule: Cash contributions and unconditional pledges are recognized as contribution revenue in the year in which the cash or pledge is received. Choice "D" is correct. State University would account for cash contributions and pledged contributions as contribution revenue in the year the collection or pledge was made. Note that the question asks for "contribution" revenue without reference to classification.
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| Contribution A | $ 10,000 |
| Contribution B | 30,000 |
| Total | $ 40,000 |
Choice "a" is incorrect. The $8,000 in contributions represents only the extent to which money has been expended in accordance with restrictions. Net assets released from restrictions are not contributions even though they do represent an increase in unrestricted net assets displayed on the Statement of Activities.
Choice "c" is incorrect. The $10,000 in contributions excludes the pledge receivable of $30,000. Both cash contributions and pledges are recognized as contributions.
Choice "b" is incorrect. The combination of expended contributions (net assets released from restrictions) and the uncollected pledges is incorrect. Net assets released from restrictions are not contributions. Contributions are the total of contributions received and pledges.
