Accounting WAEC

In a not-for-profit making organization, when the total income is less than the total expenditure, the difference is a?

A. surplus
B. shortfall
C. loss
D. deficit

Correct Answer: Option D

D. deficit

Explanation

A deficit occurs for a nonprofit organization whenever its expenses exceed its revenue. (income is less than expenditure) . This is also true of businesses and government agencies. Deficits can be difficult for nonprofit organizations to overcome because they are heavily dependent upon the generosity of donors to stay afloat.

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