A voluntary health and welfare entity sends a mailing to all of its members including those who
Question:
A voluntary health and welfare entity sends a mailing to all of its members including those who have donated in the past and others who have never donated. The mailing, which had a total cost of $22,000, asks for monetary contributions to help achieve the charity’s stated mission. In addition, 80 percent of the material included in the mailing is educational in nature, providing data about the entity’s goals. Which of the following is true?
a. Some part of the $22,000 should be reported as a program service cost because of the educational materials included.
b. No part of the $22,000 should be reported as a program service cost because there is no specific call to action.
c. No part of the $22,000 should be reported as a program service cost because the mailing was sent to both previous donors and individuals who have not made donations.
d. Some part of the $22,000 should be reported as a program service cost because more than 50 percent of the material was educational in nature.
Step by Step Answer:
Advanced Accounting
ISBN: 978-1259444951
13th edition
Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupni