Management Control Systems in Nonprofit Organizations Will Probably Never Be

question 141

Multiple Choice

Management control systems in nonprofit organizations will probably never be as highly developed as in profit-seeking firms.Why?

• A)There are fewer discretionary fixed costs in nonprofit organizations.
• B)Organizational goals are clearer in nonprofit organizations.
• C)Measurement of goals is easier in nonprofit organizations.
• D)The motivation and incentives of employees in nonprofit organizations differ from those of employees in profit-seeking firms.

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Definitions:

Financial Statements

Reports that provide an overview of a company's financial condition, including balance sheets, income statements, and cash flow statements.

Income Summary

An account used in the closing process that summarizes the revenues and expenses for a period, helping to determine the net income or loss.

Revenue Account

An account that tracks the income earned by a business from its normal operations, such as sales of goods or services.

Capital

Financial resources or assets owned by a business, used to fund operations and investments.