Which of the Following Is a Major Difference Between a Not-For-Profit

question 21

Multiple Choice

Which of the following is a major difference between a not-for-profit hospital's statement of operations and statement of changes in net assets?

• A)contributions are not reported in the statement of operations,but are reported in the statement of changes in net assets.
• B)net assets released from restrictions are not reported in the statement of operations,but are reported in the statement of changes in net assets.
• C)the statement of operations does not cover changes in both unrestricted and restricted net assets,but the statement of changes in net assets does cover changes in both unrestricted and restricted net assets.
• D)the statement of operations is not prepared on the cash basis of accounting,but the statement of changes in net assets is prepared on the cash basis of accounting.

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Definitions:

Useful Life

The period of time over which an asset is expected to be useful in the operations of a business.

Traceable Fixed Expense

A fixed expense that can be directly linked to a specific department, project, or segment of a business.

Net Operating Income

The amount of profit realized from a company's operations after subtracting operating expenses but before interest and taxes.

Price Hike

An increase in the selling price of goods or services, often due to higher costs or improved demand.