CERTIFICATION EXAM QUESTIONS AND CORRECT
ANSWERS (VERIFIED ANSWERS) Q&A
2026|INSTANT DOWNLAOD PDF
1. Which document defines a nonprofit’s primary purpose and
legal existence?
A. Bylaws
B. Articles of Incorporation
C. Strategic Plan
D. Annual Report
Rationale: The Articles of Incorporation legally establish the
organization.
Correct Answer: B
2. What is the main role of a nonprofit board of directors?
A. Daily operations
B. Staff supervision
C. Governance and oversight
D. Marketing activities
Rationale: Boards ensure accountability and strategic direction.
Correct Answer: C
,3. What is a 501(c)(3) organization primarily exempt from?
A. Payroll taxes
B. Federal income tax
C. Property tax only
D. Sales tax only
Rationale: 501(c)(3)s are exempt from federal income tax.
Correct Answer: B
4. What is the primary purpose of bylaws?
A. Fundraising plan
B. Internal governance rules
C. Financial audit report
D. Grant application
Rationale: Bylaws guide organizational operations.
Correct Answer: B
5. What is fiduciary duty?
A. Marketing responsibility
B. Legal duty to act in best interest of organization
C. Hiring staff responsibility
D. Event planning duty
Rationale: It involves care, loyalty, and obedience.
Correct Answer: B
, 6. Which financial statement shows income and expenses?
A. Balance sheet
B. Cash flow statement
C. Income statement
D. Audit report
Rationale: Income statement tracks revenue and expenses.
Correct Answer: C
7. What is restricted funding?
A. Unrestricted operational funds
B. Funds with donor-imposed limits
C. Emergency reserves
D. Tax refunds
Rationale: Donors restrict use for specific purposes.
Correct Answer: B
8. What is the main purpose of strategic planning?
A. Daily accounting
B. Long-term direction setting
C. Hiring volunteers
D. Payroll processing
Rationale: It defines organizational goals and direction.
Correct Answer: B