CAF-1 · Chapter 13 · Question 12 of 15
An NPO sets up a specific fund strictly to contribute to the school fees of local children using a grant of Rs. 24 million. How are these funds generally classified?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) As restricted funds subject to external limits on their use.
Explanation
Funds established for specific purposes with restrictions on their use are classified as restricted funds in an NPO's financial statements.
More Accounting for NPOs MCQs
- Q14If an NPO has a deficit for the year, how is it presented?
- Q15What is the formula used in a subscription T-account to find the subscription income for the year?
- 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…