PRC-3 · Chapter 2 · Question 55 of 61
A charitable foundation collects donations to run a free clinic. Since it does not exist to make a profit for owners, it does not prepare a traditional Profit & Loss statement. Instead, it prepares an:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) Income and Expenditure account
Explanation
Not-for-profit organizations prepare an Income and Expenditure account to determine if they have generated a surplus or a deficit over the financial year.
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