Which of the Following Statements Regarding Specific Not-For-Profit Transactions Is

question 3

Multiple Choice

Which of the following statements regarding specific not-for-profit transactions is FALSE?

• A)Not-for profit organizations generally have the option of determining a fair value at the day of receipt or recording it at a nominal value if it is materials or services
• B)Not-for-profit organizations reflect capital assets and intangibles at the book value at the transaction date.
• C)Not-for-profit organizations determine control based on its ability to control the board of directors of the other entity.
• D)Not-for profit organizations require additional disclosure with respect to strategic investments, related party transactions, and allocated expenses.

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Definitions:

Firm's Assets

The economic resources or valuable items owned by a company that are expected to provide future benefits.

Call Option

A financial contract that gives the buyer the right, but not the obligation, to buy a stock, bond, commodity, or other asset at a specific price within a specific time period.

Strike Price

The agreed-upon rate at which the possessor of an option may acquire (if it's a call option) or dispose of (if it's a put option) the underlying financial instrument or commodity.

Option

A financial derivative that gives the holder the right, but not the obligation, to buy or sell an asset at a specified price within a specified time.