A Good Measure of Whether a Not-For-Profit Organization Is Spending

question 4

Multiple Choice

A good measure of whether a not-for-profit organization is spending too much on overhead,such as general and administrative expenses,is

• A) Percentage of unrestricted net assets to operating expenses.
• B) Current ratio.
• C) Total revenues divided by total expenses.
• D) Percentage of total expenses spent on the program function as opposed to supporting the programs.

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Definitions:

Custodian

An entity or individual responsible for safeguarding or managing someone else's property or financial assets.

Accounting Records

Documents and books that keep track of all financial transactions of an entity for the purpose of financial reporting.

Company Asset

Assets owned by a company, including both tangible and intangible resources, used in operating the business.

Internal Control

A process designed to provide reasonable assurance regarding the achievement of objectives related to operations, reporting, and compliance.