In Not-For-Profit Accounting, an Acquisition Occurs When One Not-For-Profit Entity

question 25

Multiple Choice

In not-for-profit accounting, an acquisition occurs when one not-for-profit entity obtains:

• A) Significant influence over another not-for-profit entity.
• B) More than 50% of another not-for-profit entity's fixed assets.
• C) The right to collect more than 20% of pledged contributions.
• D) Control over another not-for-profit entity.
• E) None of these answer choices are correct. An acquisition can only occur for profit-oriented entities.

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Definitions:

Cash Balance

The amount of cash or cash equivalents a company or individual possesses at any given time.

Disbursements

The act of paying out or distributing money, often by a business for various expenses.

Equipment Account

An account that tracks the cost of equipment a company owns, minus any accumulated depreciation.

Liability Account

An account that records obligations or amounts owed to others that will require a future outflow of resources.