Why does the mortgage appear as part of a current liability and a long-term liability? 2. What are the three categories of net asset funds? Which one is used as the operating fund? 3. Why does a nonprofit need a chart of accounts? 4. If only asset accounts are affected by a transaction, why is the accounting equation still balanced? 5. Why is deferred revenue a liability? 6. Explain the difference between a current ratio and working capital in relation to examining liquidity. 7. What is the difference between liquidity ratios and long-term solvency ratios? 8. Why does profitability matter to nonprofits? 9. Why is financial analysis of a nonprofit more accurate if several years of data are available rather than only data from a single year? 10. Why is diversification so important for some nonprofits? 11. What is performance-based budgeting? 12. Describe the balanced scorecard system and explain its value. 13. What impacts can a capital budget have on an operating budget? 14. Which bonds have tax exemptioncorporate or municipal bonds? 15. What are the three objectives in the selection of investment vehicles? 16. Why is it important for a nonprofit to develop and maintain?

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1 Mortgages can appear as both current liabilities and longterm liabilities depending on the time frame of repayment The portion of the mortgage due within the next year is classified as a current lia... View the full answer