A Good Measure of Whether a Not-For-Profit Organization Is Operating

question 30

Multiple Choice

A good measure of whether a not-for-profit organization is operating its programs efficiently is

• A) Fund-raising expenses as a percentage of public support.
• B) The ratio of program expenses to number of clients served.
• C) Total revenues divided by total expenses.
• D) Percentage of total expenses spent on the program function as opposed to support function.

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Definitions:

Functional Currency

The currency of the primary economic environment in which the company predominantly generates and expends cash.

Historical Rates

Exchange rates used for the conversion of items on the financial statements that have remained unchanged from past to present.

Foreign Subsidiary

A company owned or controlled by another company, the parent company, that is based in a different country than the subsidiary.

Functional Currency

The functional currency is the main currency used by a business or economic entity, reflecting the primary economic environment in which it operates.