Which of the Following Is Not True of a Statement

question 28

Multiple Choice

Which of the following is not true of a Statement of Activities prepared for a not-for-profit organization?

• A) Expenses are shown only as decreases in unrestricted net assets
• B) Reclassifications for expiration of time restrictions are shown in the revenues and support section
• C) Unrealized gains or losses on investments are shown only as increases in unrestricted net assets
• D) Expenses are classified by function within the categories of Program Services and Supporting Services either in the Statement or the footnotes

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Definitions:

Risk-Free Rate

An ideal rate of return on an investment with no risk, typically represented by government bond yields.

Market Risk Premium

The increased return an investor hopes to gain by investing in a risky market portfolio rather than in assets free of risk.

Required Return

The minimum rate of return on an investment necessary to compensate the investor for the level of risk assumed.

Overall Return

The total gain or loss experienced on an investment over a given period, taking into account capital gains, dividends, and interest.