Contributed Services Are Recognized as Revenue for a Private Not-For-Profit

question 162

Multiple Choice

Contributed services are recognized as revenue for a private not-for-profit when the service:

• A) Is related to administration and fund raising activities.
• B) Requires specialized skills, is provided by someone possessing those skills, and typically would be purchased if not provided by donation.
• C) A and B are both required for the service to be recorded as revenue
• D) None of the above, contributed services are not recorded as revenue

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Definitions:

Diseconomies of Scale

A situation in which a firm experiences an increase in average costs due to an increase in its size or output level, often resulting from inefficiencies and higher per unit costs.

Economies of Scale

Cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output generally decreasing with increasing scale.

Demand Curves

Visual diagrams that illustrate the connection between a product's price and the amount consumers are willing to buy.

MC = MR

An economic principle that firms reach the optimal level of production when marginal cost equals marginal revenue.