In a nongovernmental not-for-profit entity, which of the following should be included in total expense?

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In a nongovernmental not-for-profit entity, which of the following should be included in total expense?

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Answer 1

### Grants to the organization - Yes
Depreciation - Yes

Answer 2

## Step1: Identify the components of total expense
### In accounting, total expense includes all costs incurred by the entity during the period. This includes both operating and non-operating expenses.
## Step2: Determine if grants are considered an expense
### Grants are financial aid given to an organization, which is typically considered revenue rather than an expense. However, in the context of a not-for-profit entity, grants may be used to cover expenses, making them indirectly part of total expense.
## Step3: Assess the role of depreciation
### Depreciation is the allocation of the cost of a tangible asset over its useful life. It is a non-cash expense that reduces the value of an asset as it is used. Depreciation is recognized as an expense in accounting.

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In a nongovernmental not-for-profit entity, which of the following should be included in total expense?

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