CAF-1 · Chapter 13 · Question 1 of 15
What is the primary difference between a Non-Profit Organization (NPO) and a commercial entity?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) The main objective of an NPO is to provide services rather than to earn profits.
Explanation
Unlike commercial entities, the main objective of an NPO is to provide services to its members or the public, not to earn profits, and they do not have ownership interests like shares.
More Accounting for NPOs MCQs
- 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?
- Q6An NPO runs a small coffee bar to generate extra funds. How should the financial results of this trading activity be presented?
- Q7An NPO receives a donation of medicines to be distributed to a community at no charge. How should this inventory be measured in the…