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Not-for-Profit Exam Questions And Answers
|Latest 2025 | Guaranteed 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 - Answer✔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 - Answer✔A. True
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 - Answer✔C. 29
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, ©BRIGHTSTARS 2025 ALL RIGHTS RESERVED 11:22 AM A+
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) - Answer✔C. 501(c)(3)
Which of the following is not a person or organization who would use NFP Financial
Statements?
A. Financial Institutions
B. Oversight Agencies
C. A Corporation
D. Donors and Granting Agencies - Answer✔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 - Answer✔D. Statement of Funds Flow
True or False: The accounting equation of a nonprofit is Assets = Liabilities + Net Assets
A. True
B. False - Answer✔A. True
True or False: The Statement of Financial Position is the equivalent of a for profit income
statement.
A. True
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Not-for-Profit Exam Questions And Answers
|Latest 2025 | Guaranteed 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 - Answer✔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 - Answer✔A. True
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 - Answer✔C. 29
1|P a g e
, ©BRIGHTSTARS 2025 ALL RIGHTS RESERVED 11:22 AM A+
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) - Answer✔C. 501(c)(3)
Which of the following is not a person or organization who would use NFP Financial
Statements?
A. Financial Institutions
B. Oversight Agencies
C. A Corporation
D. Donors and Granting Agencies - Answer✔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 - Answer✔D. Statement of Funds Flow
True or False: The accounting equation of a nonprofit is Assets = Liabilities + Net Assets
A. True
B. False - Answer✔A. True
True or False: The Statement of Financial Position is the equivalent of a for profit income
statement.
A. True
2|P a g e
