Which of the Following Statements Is True Regarding Fund Accounting

question 51

Multiple Choice

Which of the following statements is true regarding fund accounting for not-for-profit organizations (NPOs) ?

• A)Fund accounting may provide a good mechanism for facilitating reporting to donors for restricted grants.
• B)Fund accounting may be used by NPOs for external purposes,but not internal purposes.
• C)Fund accounting is not allowed.
• D)SFAS Nos.116 and 117 method of reporting three classes of net assets (unrestricted,temporarily restricted,and permanently restricted)replaces fund accounting for both internal and external reporting purposes.

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Definitions:

Total Surplus

The sum of consumer surplus and producer surplus in a market, representing the total benefits to society from trading a good or service.

Consumer Surplus

The difference between the total amount consumers are willing to pay for a good or service versus the total amount they actually pay.

Total Surplus

The sum of consumer surplus and producer surplus, representing the total benefit to society from the production and consumption of goods or services.

Inferior Good

A type of good for which demand decreases as the income of the consumer increases, opposite to a normal good.