Which of the following statements is true of a not-for-profit organization?
A) It makes profits.
B) It does not pay expenses.
C) It can earn excess revenue.
D) It cannot operate like a business.
E) It rewards the proprietor of the organization with earned profits.

Question

Quizplus · Accepted Answer

A not-for-profit organization can earn excess revenue, but it is not distributed to shareholders or individuals associated with the organization. Instead, it is reinvested back into the organization to further its mission or goals. Not-for-profit organizations are different from for-profit businesses in that their primary purpose is to serve the public or a specific cause, rather than earning profits for their owners.

Which of the Following Statements Is True of a Not-For-Profit