NONPROFIT EXAM SET QUESTIONS
AND ANSWERS
Which option is NOT included in the Statement of Activities:
A. Revenues
B. Reclassifications
C. Gains/Losses
D. Expenses
E. None of the above - ANSWER-E. None of the above
True or False: A purpose of the Statement of Functional Expenses is that you must
report expenses natural classification only.
A. True
B. False - ANSWER-B. False
True or False: The Statement of Functional expenses number of reporting
classifications varies by the nature of the services rendered.
A. True
B. False - ANSWER-A. True
Which of the following is not an element of a Statement of Activities
A. Revenue
B. Expenses
C. Retained Earnings
D. Reclassifications - ANSWER-C. Retained Earnings
What is Revenue reported as for an NFP?
A. Contributions
B. Net assets
C. Restricted income
D. Increase in funds - ANSWER-B. Net assets
True or False: A not for profit is not allowed to earn a profit.
A.True
B. False - ANSWER-B. False
Which of the following describes the purpose of the statement of functional
expenses?
A. To provide information about the costs of services provided by the NFP and how
the NFP uses the support it receives
B. To report totals for the classifications of assets, liabilities, and net assets
C. To provide information on an organization's ability to provide for its short-term
debt obligations
D. To predict the operating and non-operating expenses that the organization will
have in the following year - ANSWER-A. To provide information about the costs of
services provided by the NFP and how the NFP uses the support it receives
, A nonprofit's revenues and expenses are reported on its statement of _____.
A. Financial Position
B. Activities
C. Cash Flow
D. Expenses - ANSWER-B. Activities
What is considered a donation/contribution with no restrictions?
A. Interest Income
B. a donation for 5 kids to go to camp
C. a 50,000 donation throughout a 5 year period
D. a 100,000 check to the not for profit - ANSWER-D. a 100,000 check to the not for
profit
Which of the following is NOT a restriction of current assets?
A. Donors restricting use of property.
B. Donors restricting use of cash and investments.
C. Donors or the NFP may designate funds for long-term purposes.
D. NFP may issue debt which may require specific requirements for cash. -
ANSWER-A. Donors restricting use of property.
All of the following are requirements that NFP's must disclose for liquidity except:
A. Relevant information about the nature and amount of limitations on the use of
cash and cash equivalents
B. Contractual limitations on the use of particular assets
C. Timing issues related to liquidity and the period they're reported
D. Quantitative and additional qualitative information in the notes about the
availability of an NFP's financial assets to meet cash needs for general expenditure -
ANSWER-C. Timing issues related to liquidity and the period they're reported
Which option is NOT included in the NFP financial statements:
A. Statement of Financial Position
B. Statement of Activities
C. Statement of Functional Expenses
D. Statement of Estimated Tax
E. Statement of Cash Flows - ANSWER-D. Statement of Estimated Tax
You must report expenses by which classifications?
A. Functional & Natural
B. Functional & Logical
C. Logical & Natural
D. Functional & Rational - ANSWER-A. Functional & Natural
(True/False) Classification includes grouping expenses by major classes of program
activities and supporting services including general administrative, fundraising, and
membership development?
A. True
B. False - ANSWER-A. True
If an expense is not readily identifiable to a single program or activity, they must be
allocated to what?
AND ANSWERS
Which option is NOT included in the Statement of Activities:
A. Revenues
B. Reclassifications
C. Gains/Losses
D. Expenses
E. None of the above - ANSWER-E. None of the above
True or False: A purpose of the Statement of Functional Expenses is that you must
report expenses natural classification only.
A. True
B. False - ANSWER-B. False
True or False: The Statement of Functional expenses number of reporting
classifications varies by the nature of the services rendered.
A. True
B. False - ANSWER-A. True
Which of the following is not an element of a Statement of Activities
A. Revenue
B. Expenses
C. Retained Earnings
D. Reclassifications - ANSWER-C. Retained Earnings
What is Revenue reported as for an NFP?
A. Contributions
B. Net assets
C. Restricted income
D. Increase in funds - ANSWER-B. Net assets
True or False: A not for profit is not allowed to earn a profit.
A.True
B. False - ANSWER-B. False
Which of the following describes the purpose of the statement of functional
expenses?
A. To provide information about the costs of services provided by the NFP and how
the NFP uses the support it receives
B. To report totals for the classifications of assets, liabilities, and net assets
C. To provide information on an organization's ability to provide for its short-term
debt obligations
D. To predict the operating and non-operating expenses that the organization will
have in the following year - ANSWER-A. To provide information about the costs of
services provided by the NFP and how the NFP uses the support it receives
, A nonprofit's revenues and expenses are reported on its statement of _____.
A. Financial Position
B. Activities
C. Cash Flow
D. Expenses - ANSWER-B. Activities
What is considered a donation/contribution with no restrictions?
A. Interest Income
B. a donation for 5 kids to go to camp
C. a 50,000 donation throughout a 5 year period
D. a 100,000 check to the not for profit - ANSWER-D. a 100,000 check to the not for
profit
Which of the following is NOT a restriction of current assets?
A. Donors restricting use of property.
B. Donors restricting use of cash and investments.
C. Donors or the NFP may designate funds for long-term purposes.
D. NFP may issue debt which may require specific requirements for cash. -
ANSWER-A. Donors restricting use of property.
All of the following are requirements that NFP's must disclose for liquidity except:
A. Relevant information about the nature and amount of limitations on the use of
cash and cash equivalents
B. Contractual limitations on the use of particular assets
C. Timing issues related to liquidity and the period they're reported
D. Quantitative and additional qualitative information in the notes about the
availability of an NFP's financial assets to meet cash needs for general expenditure -
ANSWER-C. Timing issues related to liquidity and the period they're reported
Which option is NOT included in the NFP financial statements:
A. Statement of Financial Position
B. Statement of Activities
C. Statement of Functional Expenses
D. Statement of Estimated Tax
E. Statement of Cash Flows - ANSWER-D. Statement of Estimated Tax
You must report expenses by which classifications?
A. Functional & Natural
B. Functional & Logical
C. Logical & Natural
D. Functional & Rational - ANSWER-A. Functional & Natural
(True/False) Classification includes grouping expenses by major classes of program
activities and supporting services including general administrative, fundraising, and
membership development?
A. True
B. False - ANSWER-A. True
If an expense is not readily identifiable to a single program or activity, they must be
allocated to what?
