Solution Manual for Financial Management for
Public Health, and Not-for-Profit Organizations
8th Edition by Finkler, Calabrese & Smith
Verified Chapters 1 - 15, Newest Edition
Chapter 1: Introduction to Financial Management in Public Health and
Not-for-Profit Organizations
1. The primary goal of financial management in not-for-profit
organizations is to:
a) Maximize shareholder wealth
b) Minimize expenses
c) Ensure financial sustainability while achieving organizational
mission
d) Maximize revenues
Rationale: Unlike for-profit entities, NPOs focus on sustaining operations
and fulfilling their mission rather than maximizing profits.
2. Which of the following best describes a not-for-profit
organization?
a) An organization that cannot make a profit under any
circumstances
b) An organization that reinvests any surplus into its mission
rather than distributing profits
c) A government agency
d) A private corporation
,Rationale: NPOs generate revenue but use it to support their mission
instead of distributing it as profit.
3. Financial management decisions in public health organizations
primarily involve:
a) Choosing investments for personal wealth
b) Allocating resources efficiently to provide services
c) Setting stock prices
d) Maximizing executive bonuses
Rationale: The focus is on using limited resources to maximize
community health outcomes.
4. Which of the following is NOT a characteristic of public health
organizations?
a) Mission-driven
b) Profit-driven
c) Reliance on grants and donations
d) Accountability to the public
Rationale: Public health organizations prioritize service delivery over
profit generation.
5. A key distinction between public health and private sector
financial management is:
a) Both are focused solely on profit
b) Public health prioritizes service delivery and resource
allocation over profitability
c) Only private sector manages budgets
d) Public health does not track financial performance
,Rationale: Public health organizations must balance financial
constraints with service obligations.
Chapter 2: Financial Statements and Accounting
6. Which financial statement shows an organization’s assets,
liabilities, and net assets at a specific point in time?
a) Statement of cash flows
b) Income statement
c) Balance sheet
d) Budget report
Rationale: The balance sheet reflects the financial position at a specific
date.
7. Which financial statement measures revenues and expenses over
a period of time?
a) Balance sheet
b) Income statement
c) Statement of cash flows
d) Fund statement
Rationale: The income statement shows the organization's operational
performance during a period.
8. Net assets in a not-for-profit organization are equivalent to:
a) Liabilities minus revenues
b) Assets minus liabilities
c) Revenues minus expenses
d) Cash on hand
, Rationale: Net assets represent the residual interest in the
organization’s resources.
9. Which of the following is an example of a restricted net asset?
a) Funds available for any purpose
b) Donations designated for a specific program
c) Unrestricted operational revenue
d) Cash on hand
Rationale: Restricted net assets can only be used for their designated
purpose.
10. Accrual accounting differs from cash accounting because it:
a) Records only cash transactions
b) Recognizes revenues and expenses when they are earned or
incurred, not necessarily when cash changes hands
c) Ignores liabilities
d) Focuses only on grants
Rationale: Accrual accounting provides a more accurate picture of
financial performance.
Chapter 3: Budgeting in Public Health Organizations
11. The primary purpose of budgeting in not-for-profit
organizations is to:
a) Generate profits
b) Plan and control resources to achieve organizational goals
c) Maximize cash reserves
d) Reduce staff
Public Health, and Not-for-Profit Organizations
8th Edition by Finkler, Calabrese & Smith
Verified Chapters 1 - 15, Newest Edition
Chapter 1: Introduction to Financial Management in Public Health and
Not-for-Profit Organizations
1. The primary goal of financial management in not-for-profit
organizations is to:
a) Maximize shareholder wealth
b) Minimize expenses
c) Ensure financial sustainability while achieving organizational
mission
d) Maximize revenues
Rationale: Unlike for-profit entities, NPOs focus on sustaining operations
and fulfilling their mission rather than maximizing profits.
2. Which of the following best describes a not-for-profit
organization?
a) An organization that cannot make a profit under any
circumstances
b) An organization that reinvests any surplus into its mission
rather than distributing profits
c) A government agency
d) A private corporation
,Rationale: NPOs generate revenue but use it to support their mission
instead of distributing it as profit.
3. Financial management decisions in public health organizations
primarily involve:
a) Choosing investments for personal wealth
b) Allocating resources efficiently to provide services
c) Setting stock prices
d) Maximizing executive bonuses
Rationale: The focus is on using limited resources to maximize
community health outcomes.
4. Which of the following is NOT a characteristic of public health
organizations?
a) Mission-driven
b) Profit-driven
c) Reliance on grants and donations
d) Accountability to the public
Rationale: Public health organizations prioritize service delivery over
profit generation.
5. A key distinction between public health and private sector
financial management is:
a) Both are focused solely on profit
b) Public health prioritizes service delivery and resource
allocation over profitability
c) Only private sector manages budgets
d) Public health does not track financial performance
,Rationale: Public health organizations must balance financial
constraints with service obligations.
Chapter 2: Financial Statements and Accounting
6. Which financial statement shows an organization’s assets,
liabilities, and net assets at a specific point in time?
a) Statement of cash flows
b) Income statement
c) Balance sheet
d) Budget report
Rationale: The balance sheet reflects the financial position at a specific
date.
7. Which financial statement measures revenues and expenses over
a period of time?
a) Balance sheet
b) Income statement
c) Statement of cash flows
d) Fund statement
Rationale: The income statement shows the organization's operational
performance during a period.
8. Net assets in a not-for-profit organization are equivalent to:
a) Liabilities minus revenues
b) Assets minus liabilities
c) Revenues minus expenses
d) Cash on hand
, Rationale: Net assets represent the residual interest in the
organization’s resources.
9. Which of the following is an example of a restricted net asset?
a) Funds available for any purpose
b) Donations designated for a specific program
c) Unrestricted operational revenue
d) Cash on hand
Rationale: Restricted net assets can only be used for their designated
purpose.
10. Accrual accounting differs from cash accounting because it:
a) Records only cash transactions
b) Recognizes revenues and expenses when they are earned or
incurred, not necessarily when cash changes hands
c) Ignores liabilities
d) Focuses only on grants
Rationale: Accrual accounting provides a more accurate picture of
financial performance.
Chapter 3: Budgeting in Public Health Organizations
11. The primary purpose of budgeting in not-for-profit
organizations is to:
a) Generate profits
b) Plan and control resources to achieve organizational goals
c) Maximize cash reserves
d) Reduce staff
