If a Not-For-Profit Organization That Has Had Annual Revenues Above

question 14

Multiple Choice

If a not-for-profit organization that has had annual revenues above $500,000 for a number of years, subsequently has revenues (for two years or more) significantly lower than $500,000, how must it report its Capital Assets?

• A) It may choose to expense future capital assets at the date of their acquisition.
• B) It must continue to capitalize and amortize its capital assets.
• C) It may choose to capitalize but not amortize future capital asset additions.
• D)It must derecognize capital assets recognized in past periods.

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Definitions:

Loss on Sale

This refers to the situation where the sale price of an asset is less than its book value, resulting in a financial loss for the entity.

Equity Method

An accounting technique used when an investor holds significant influence over, but not majority ownership of, another company, incorporating the investor's share of the profits and losses.

Equity Method

The equity method is a type of accounting used for investments, where the investment is initially recorded at cost and subsequently adjusted to reflect the investor's share of the net assets of the investee.