Statement of Activities and Non-profit Organizations

A non-profit organization is a non-commercial entity that operates for a charitable, religious, educational, or social purpose. They are exempt from paying taxes because they do not operate for profit. Non-profit organizations rely on donations, grants, and contributions from individuals, corporations, and foundations to fund their operations.

Statement of Activities

The statement of activities is a financial statement that shows the revenues, expenses, and changes in net assets of a non-profit organization. It is similar to the income statement of a for-profit organization. The statement of activities shows the financial performance of the organization for a specific period, usually a fiscal year.

Revenue

Revenue is the income that a non-profit organization receives from its activities, such as donations, grants, and contributions. Revenue is recognized when it is earned, which means when the organization has fulfilled its obligations to the donor or grantor. Revenue is shown in the statement of activities under the caption of revenue.

Capital

Capital is the assets that a non-profit organization has accumulated over time, such as investments, property, and equipment. Capital is not shown in the statement of activities because it is not related to the financial performance of the organization for a specific period.

Conclusion

In conclusion, the correct answer is option B, revenue. Contributions received by a non-profit organization are shown in the statement of activities under the caption of revenue because they represent the income earned by the organization from its activities. Capital, on the other hand, is not shown in the statement of activities because it is not related to the financial performance of the organization for a specific period.