North Carolina Funeral Law Practice Exam

What happens if the reserve account equals $21 per member?

1. Additional funds are distributed among members

2. No further contributions are necessary

3. Members must agree to increase the reserve

4. The provision is evaluated for necessity

The correct answer is: No further contributions are necessary

When the reserve account equals $21 per member, the correct outcome is that no further contributions are necessary. This indicates that the reserve account has reached a level that is deemed sufficient for the intended purposes of the fund, such as ensuring the financial stability of the organization or providing for future obligations related to funeral services. In this context, a sufficient reserve implies that the current contributions have adequately covered the projected needs and risks associated with the member services, alleviating the immediate requirement for additional funding. This situation reflects a well-managed financial strategy, where the balance in the reserve account assures members that their contributions have fulfilled the financial mandate laid out by the organization. Other options reflect actions or evaluations that might be necessary under different circumstances, such as circumstances where the reserve is insufficient or varies from predetermined benchmarks. However, with the reserve at the specified amount, those actions are not needed.