Chapter 12: Financial Management

What practice involves the analysis of various financial ratios?

• financial analysis

• financial accounting

• financial management

• managerial accounting

Which type of funds need to be invested in perpetuity?

• liquid assets

• pure endowment

• unrestricted funds

• quasi-endowment

Accounting on a(n) ______ basis counts money earned as well as obligations for expenditures not yet incurred.

• cash

• credit

• accrual

• multilevel

What type of financial statement provides a snapshot of an organization’s finances taken at a point in time?

• activities

• cash flows

• financial position

• functional expenses

Which type of financial statement summaries an organization’s assets and liabilities?

• cash flows

• activities

• financial position

• functional expenses

Which type of financial statement shows how every category of expense is allocated?

• activities

• cash flows

• financial position

• functional expenses

What is a decline in the value of an asset called?

• inflation

• deflation

• amortization

• depreciation

Which term to describe an organizational operating surplus?

• ratio

• solvency

• liquidity

• profitability

What budget approach requires organizations to justify their budgets from the ground up?

• zero-based

• cost center

• incremental

• use-it-or-lose-it

According to Worth, nonprofit organizations measure their success through the ______.

• fundraising results

• number of clients served

• financial and program results

• number of endowments established