Which of the Following Is a Probable Use a Donor

question 50

Multiple Choice

Which of the following is a probable use a donor would make of the external financial statements of a not-for-profit entity?

• A)To determine the proportion of entity resources directed to programs as opposed to fund-raising.
• B)To determine the creditworthiness of the entity for investment purposes.
• C)To determine the salaries paid to all employees of the entity.
• D)To determine the budget of the entity.

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Definitions:

Profit-maximizing

A strategy or process utilized by businesses to determine the price and output level that results in the highest profit.

Labor Cost

The total sum of all compensation given to employees for their services, including wages, benefits, and payroll taxes.

Total Revenue

The total amount of money a firm receives from the sale of its goods or services, calculated as the unit price times the quantity sold.

Wage Payment

The compensation that employees receive for their labor or services, typically expressed as an hourly rate or salary.