A Small Cushion Strategy Is Appropriate When Capacity Is Inexpensive

question 42

True/False

A small cushion strategy is appropriate when capacity is inexpensive.

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Definitions:

Restricted Donations

Donations given to an organization with specific conditions attached regarding how the funds can be used, often designated for a particular purpose or project.

Capital Assets

Long-term assets acquired or controlled by a business for its continued operations and not expected to be converted into cash within a year.

Deferral Method

An accounting method in which revenue or expenses are deferred to a future period to better match income with the expenses incurred to generate it.

Restricted Contribution

A donation or contribution to a nonprofit organization that has specific conditions or restrictions on its use by the donor.