Which of the Following Is True of a Statement of Activities

question 122

Multiple Choice

Which of the following is true of a Statement of Activities prepared for a private college or university?

• A) All expenses are shown as unrestricted.
• B) Reclassifications from unrestricted to permanently restricted net assets are reported when the governing board designates unrestricted funds for permanent investment in the endowment.
• C) Only realized gains or losses on investments are reported.
• D) All of the above are true.

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Definitions:

Allocation of Limited Resources

The process of distributing scarce resources among various projects or business units.

Incremental Costs

The additional costs incurred when producing an additional unit of a product or service.

Fixed Manufacturing Costs

Costs that do not change with the level of production, such as rent, salaries, and insurance, which are incurred regardless of output volume.

Full Capacity

The maximum level of output that a company can sustain to make a product or provide a service.