cion Completon Status QUESTION 1 Which of the following is N

cion Completon Status. QUESTION 1 Which of the following is NOT a reason for which a not-for-profit organization would need to generate a surplus? ®A Retire debt. B. Continue a program beyond the period that initial funding is provided. C. To pay bonuses at year end. D.Expand or replace physical facilities. QUESTION 2

Solution

Correct Answer (C ) To pay bonuses at the year end.

Explanation

Not for profit organizations have the primary purpose to serve the society. Welfare is the main objective behind creating a not for profit Organization. Distributing Bonuses is not why a not for profit organization needs surplus.

Surplus can be generated to pay debts of the organization, Expand or Replace physical facilities and for continuing a program beyond a period like providing shelter for natural disaster victims.