CAF-1 · Chapter 13 · Question 14 of 15
If an NPO has a deficit for the year, how is it presented?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) As a deduction from the Accumulated Fund.
Explanation
A deficit (excess of expenditure over income) reduces the net assets and is deducted from the Accumulated Fund.
More Accounting for NPOs MCQs
- Q1What is the primary difference between a Non-Profit Organization (NPO) and a commercial entity?
- Q2In the financial statements of an NPO, what is the equivalent of 'Equity' or 'Retained Earnings'?
- Q3If a club member pays their annual subscription for the upcoming year in advance, how is this recorded in the current year's financial…
- Q4A sports club has members whose subscriptions are in arrears (unpaid) at the year-end. If the club expects to receive these amounts, how…
- Q5Under the deferral method, how should an NPO account for a tangible capital asset procured using a restricted government grant?