Which of the following is a probable use an individual donor would make of the external financial statements of a not-for-profit entity?
A) To determine the proportion of entity resources directed to programs as opposed to fund-raising.
B) To determine the creditworthiness of the entity for investment purposes.
C) To determine the salaries paid to all employees of the entity.
D) To determine the budget of the entity.

Question

Which of the following is a probable use an individual donor would make of the external financial statements of a not-for-profit entity? 
A) To determine the proportion of entity resources directed to programs as opposed to fund-raising.
B) To determine the creditworthiness of the entity for investment purposes.
C) To determine the salaries paid to all employees of the entity.
D) To determine the budget of the entity.

Quizplus · Accepted Answer

Individual donors often review the external financial statements of a not-for-profit entity to understand how much of their donation goes towards the organization's programs versus administrative or fundraising expenses. This helps them assess the efficiency and effectiveness of the entity in utilizing resources towards its mission.

Which of the Following Is a Probable Use an Individual