Which of the Following Statements Is True Regarding Fund Accounting

question 53

Multiple Choice

Which of the following statements is true regarding fund accounting for not-for-profit organizations (NFPs) ?

• A) Fund accounting can be used by NFPs for external purposes,but not internal purposes.
• B) Fund accounting can provide a good mechanism for facilitating reporting to donors.
• C) Fund accounting is not allowed.
• D) Fund accounting for internal and external reporting purposes has been replaced by FASB with the three classes of net assets (unrestricted,temporarily restricted,and permanently restricted).

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Definitions:

Human Capital

The expertise, know-how, and practical experiences that a person or collective maintains, regarded in relation to their financial or worth importance to a business or country.

Nonhuman Capital

Resources or assets that are not human, such as machinery, buildings, and land, used in the production of goods and services.

Knowledge

information, understanding, or skills obtained through experience or education; the theoretical or practical understanding of a subject.

Skills

The abilities and expertise a person has acquired through experience or education, enabling them to perform specific tasks effectively.