PRC-3 · Chapter 2 · Question 32 of 61
A local sports club collects more in member subscriptions than it spends on equipment in a year. How must a strictly Not-for-Profit organization handle this extra money?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Retain it as a 'surplus' to be reinvested into the club's activities
Explanation
Not-for-profit organizations cannot distribute surplus funds as profits to owners; they must reinvest any surplus back into the organization's core mission.
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