Question

For non profit organizations, equity as commonly referred to in other businesses can be thought of as the fund balance.

Answer 1

Equity in non-profit organizations can be thought of as the fund balance, which represents the excess of assets over liabilities.

Step-by-step explanation:

Equity in non-profit organizations can be thought of as the fund balance. The fund balance refers to the excess of assets over liabilities, which represents the organization's net worth.

It is similar to equity in other businesses, where it represents the ownership value or stake.

For example, if a non-profit organization has $100,000 in assets and $80,000 in liabilities, the fund balance or equity would be $20,000 ($100,000 - $80,000).

This concept helps in understanding the financial position and stability of non-profit organizations, just like equity does for other businesses.