Skip to content

ACCA Applied Skills · Financial Management · Financial and other objectives in not-for-profit organisations

Which of the following is a recognised problem when measuring the performance of a not-for-profit organisation using financial measures alone?

A key problem is that the outputs of not-for-profit organisations, such as quality of care or social benefit, are hard to measure in monetary terms. They also have multiple objectives and stakeholders and often lack market prices, so financial measures alone are inadequate.

  1. AObjectives are usually single and easily quantified as profit
  2. BOutputs such as quality of care or social benefit are difficult to measure in monetary termsCorrect
  3. CStakeholders are always limited to shareholders
  4. DMarket prices always exist for the services provided

Explanation

Not-for-profit outputs such as welfare, education or quality of care are often intangible and hard to value in money, so financial measures alone are inadequate. The other options are the opposite of reality: such bodies have multiple objectives, many stakeholders and often no market price for services.

Did you get it right without looking?

One question tells you little. A timed set on Financial and other objectives in not-for-profit organisations shows your real accuracy, how long you take and where you lose marks.

Practise Financial and other objectives in not-for-profit organisationsFree diagnostic mock

More Financial and other objectives in not-for-profit organisations questions