Which of the following is most accurate in regard to the differences between a nonprofit and a for-profit organization?
A) A nonprofit organization does not need to generate revenue beyond what it requires to cover expenses, whereas a for-profit organization must generate considerably more revenue than is needed to cover expenses.
B) In nonprofit organizations excess revenues are primarily reinvested in the organization, whereas in for-profit organizations excess revenues are distributed to investors as dividends.
C) Although both nonprofit and for-profit organizations are concerned with generating excess revenues, there is no difference in how the organizations must pay taxes on goods purchased.
D) Although both nonprofit and for-profit organizations are concerned with generating excess revenue, only nonprofit organizations bear the extra burden of providing indigent or uncompensated care.

Question

Quizplus · Accepted Answer

Nonprofit organizations reinvest any excess revenues back into the organization to further their mission, while for-profit organizations distribute excess revenues to shareholders or owners as profits or dividends. This is a fundamental difference in how the two types of organizations handle their finances.

Which of the Following Is Most Accurate in Regard to the Differences