Which of the following is true regarding the investing activities of charitable organizations?
A)are not similar to business firms
B)acquire productive capacity (for example, buildings) to carry out their activities
C)issue common stock
D)issue bonds
E)issue preferred stock

Question

Quizplus · Accepted Answer

Charitable organizations acquire productive capacity, such as buildings, to carry out their activities. Charitable organizations do not issue common stock, bonds or preferred stock as they do not have shareholders or owners to provide capital. Additionally, investing activities of charitable organizations are similar to business firms as both types of organizations invest in assets to generate returns in the form of profits or social benefits.

Which of the Following Is True Regarding the Investing Activities