Public Schools,charities and Government Agencies Are Not Classified as Businesses

question 195

Multiple Choice

Public schools,charities and government agencies are not classified as businesses because they:

• A)have not been incorporated.
• B)do not seek to earn a profit.
• C)provide services rather than goods.
• D)do not have any stockholders. Although schools,charities,and government agencies often provide goods and services,they do not seek a profit.Therefore,they are nonprofit organizations rather than businesses.

---

Definitions:

Operating Performance

A measure of a firm's efficiency in managing its core business operations, often evaluated using metrics such as operating margin and revenue growth.

Accrual Accounting

A method of accounting that records revenues and expenses when they are incurred, regardless of when cash transactions occur.

Economic Performance

A measure of how well an entity manages its resources to produce goods and services, often evaluated through factors like GDP growth, employment levels, and productivity.

Earnings Process

The series of steps undertaken by a company to report income from its operations, culminating in the publication of financial statements.