The Statement of Functional Expenses

question 120

Multiple Choice

The Statement of Functional Expenses:

• A) Is required of voluntary health and welfare organizations only.
• B) Is required of all private not-for-profit organizations.
• C) Is required of all private colleges but not public colleges.
• D) Is no longer a required financial statement of any organization.

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Definitions:

Inefficient Use

The allocation or utilization of resources in a manner that does not maximize their potential or economic value.

Resource Prices

The costs associated with acquiring the inputs or factors of production needed to produce goods or services, such as labor, raw materials, and capital.

Variable Costs

Costs that vary directly with the level of production or output, such as materials and labor.

Law of Diminishing Returns

The principle stating that as investment in a particular area increases, the rate of profit from that investment, after a certain point, cannot continue to increase if other inputs remain constant.