A not-for-profit organization provides language training and homework assistance to immigrants. Most of the services are provided by volunteers and all the funds come from public donations. The primary objective in preparing financial statements for this organization is ________.
A)measuring the cost of services rendered.
B)predicting cash flow.
C)management evaluation.
D)stewardship.

Question

Quizplus · Accepted Answer

The primary objective in preparing financial statements for a not-for-profit organization that relies solely on public donations is stewardship. This involves ensuring that the organization's resources are being used efficiently and effectively to achieve its charitable objectives. The financial statements should provide information on the organization's revenues, expenses, assets, and liabilities, and how these have been managed over the reporting period. Measuring the cost of services rendered, predicting cash flow, and management evaluation are all important financial management tasks, but they are not the primary objective in preparing financial statements for a not-for-profit organization.

A Not-For-Profit Organization Provides Language Training and Homework Assistance to Immigrants