Advanced Accounting 10th Edition by Thomas Schaefer, Joe Ben Hoyle, Timothy Doupnik

Exercise 42

To send a mailing, a private not-for-profit charity spends $100,000.The mailing solicits donations and provides educational and other information about the charity.Which of the following is true
a.No part of the $100,000 can be reported as a program service expense.
b.Some part of the $100,000 must be reported as a program service expense.
c.No authoritative guidance exists, so the organization can allocate the cost as it believes best.
d.Under certain specified circumstances, the organization should allocate a portion of the $100,000 to program service expenses.