Not-for-Profit Exam Questions and
Answers 100% Pass
Which of the following is a characteristic of not-for-profit organizations?
A. They receive contributions from significant resource providers who do
not expect a commensurate or proportionate monetary return.
B. They operate for the purposes other than to make a profit.
C. There is an absence of ownership interest.
D. All of the above - ✔✔D. All of the above
True or False: A NFP operates to fulfill a mission to better society whereas
a FP operates to realize net profits for the owners.
A. True
B. False - ✔✔A. True
1
Katelyn Whitman, All Rights Reserved © 2025
,How many different categories of tax-exempt organizations are classified
under Section 501(c) of the Internal Revenue Code?
A. 8
B. 15
C. 29
D. 35 - ✔✔C. 29
An Educational organization is classified under which 501(c) section of the
Internal Revenue Code?
A. 501(c)(7)
B. 501(c)(10)
C. 501(c)(3)
D. 501(c)(6) - ✔✔C. 501(c)(3)
Which of the following is not a person or organization who would use NFP
Financial Statements?
A. Financial Institutions
2
Katelyn Whitman, All Rights Reserved © 2025
, B. Oversight Agencies
C. A Corporation
D. Donors and Granting Agencies - ✔✔C. A Corporation
Which of the following is NOT a basic NFP financial statement?
A. Statement of Financial Position
B. Statement of Activities
C. Statement of Functional Expenses
D. Statement of Funds Flow - ✔✔D. Statement of Funds Flow
True or False: The accounting equation of a nonprofit is Assets = Liabilities
+ Net Assets
A. True
B. False - ✔✔A. True
True or False: The Statement of Financial Position is the equivalent of a for
profit income statement.
A. True
3
Katelyn Whitman, All Rights Reserved © 2025
Answers 100% Pass
Which of the following is a characteristic of not-for-profit organizations?
A. They receive contributions from significant resource providers who do
not expect a commensurate or proportionate monetary return.
B. They operate for the purposes other than to make a profit.
C. There is an absence of ownership interest.
D. All of the above - ✔✔D. All of the above
True or False: A NFP operates to fulfill a mission to better society whereas
a FP operates to realize net profits for the owners.
A. True
B. False - ✔✔A. True
1
Katelyn Whitman, All Rights Reserved © 2025
,How many different categories of tax-exempt organizations are classified
under Section 501(c) of the Internal Revenue Code?
A. 8
B. 15
C. 29
D. 35 - ✔✔C. 29
An Educational organization is classified under which 501(c) section of the
Internal Revenue Code?
A. 501(c)(7)
B. 501(c)(10)
C. 501(c)(3)
D. 501(c)(6) - ✔✔C. 501(c)(3)
Which of the following is not a person or organization who would use NFP
Financial Statements?
A. Financial Institutions
2
Katelyn Whitman, All Rights Reserved © 2025
, B. Oversight Agencies
C. A Corporation
D. Donors and Granting Agencies - ✔✔C. A Corporation
Which of the following is NOT a basic NFP financial statement?
A. Statement of Financial Position
B. Statement of Activities
C. Statement of Functional Expenses
D. Statement of Funds Flow - ✔✔D. Statement of Funds Flow
True or False: The accounting equation of a nonprofit is Assets = Liabilities
+ Net Assets
A. True
B. False - ✔✔A. True
True or False: The Statement of Financial Position is the equivalent of a for
profit income statement.
A. True
3
Katelyn Whitman, All Rights Reserved © 2025
