Under Which of the Following Conditions Is It Appropriate for a Private

question 147

Multiple Choice

Under which of the following conditions is it appropriate for a private not-for-profit to allocate the cost of mass mailings from fund raising to a program related activity, such as Public Education?

• A) The purpose of the mailing includes accomplishing program functions.
• B) The audience is selected based on characteristics other than ability to make contributions.
• C) The mailing calls for specific action by the recipient that is consistent with the goals of the not-for-profit's mission.
• D) All of the above.

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Definitions:

Operating Activities

These involve the primary, day-to-day actions that generate revenue for a company, such as selling products or services.

Direct Method

A method in financial accounting that formats cash flow statements by listing major operating cash receipts and payments, used to provide a clearer view of cash from operating activities.

Fully Depreciated Equipment

An asset that has reached the end of its useful life for accounting purposes, having its cost fully allocated to depreciation expense.

Statement of Cash Flows

A finance report summarizing every cash inflow from ongoing business operations and external investments, and all cash outflows for corporate activities and investment purposes, within a set period.