The FASB States That Depreciation Expense in a Not-For-Profit Organization

question 3

Multiple Choice

The FASB states that depreciation expense in a not-for-profit organization should be:

• A) Assigned to or allocated to the functions to which it relates.
• B) Reported under the management and general function.
• C) Disclosed in the notes to the financial statements.
• D) Allocated to program but not support functions.

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Definitions:

Sales Required

The minimum sales needed to achieve a specific financial goal or to cover costs.

Variable Cost

Costs that vary directly with the level of production or output.

Break-even Point

The level of production or sales at which total revenues equals total expenses, with no net loss or gain.

Contribution Margins

The amount remaining from sales revenue after all variable expenses have been deducted, indicating how much contributes to covering fixed costs and generating profit.