©BRIGHTSTARS 2025 ALL RIGHTS RESERVED 11:22 AM A+
NFP Exam 1 Questions And Answers |Latest
2025 | Guaranteed Pass.
Characteristics of NFP - Answer✔-receive contributions from resource providers that do not
expect a benefit in return
- do not provide goods and services at a profit
- do not have equity
- cash flows are different (might have more donations during Christmas and Thanksgiving that
need to last)
Characteristics of For Profit - Answer✔-goal is to maximize stock prices
-can change prices of goods and services to increase revenue
-know their customers and owners
501(c)3 organizations - Answer✔tax exempt and donors can give tax deductible donations from
federal income tax
501 (c) organization - Answer✔tax-exempt but donors cannot deduct donations from federal
income taxes
Public charties - Answer✔funded, operated, and monitored by the public at large rather than
by a limited number of donors (1/3 of support is from gov't or public support
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, ©BRIGHTSTARS 2025 ALL RIGHTS RESERVED 11:22 AM A+
Private foundation - Answer✔receives support from a small number of individuals or
corporations, and investment income rather than from the public at large
501(c)3 organizations - Answer✔public charities and private foundations
organizational test for exempt status - Answer✔-articles of incorporation must follow IRC
section 501
-cannot benefit private interests
-cannot try to influence legislation
Follow FASB - Answer✔non gov't NFP; mostly tax exempt
Follow FASB organizations - Answer✔-private universities, healthcare, religious, literary, service
organization
- Harvard, UNA Foundation
GASB - Answer✔governmental NFP; states and cities
Follow GASB - Answer✔-public universities, and hospitals
-UNA
Form 990 - Answer✔-NFP tax form
-annual compliance reporting
Governmental NFP organizations - Answer✔-Administer public affairs (municipality)
-Election of officers by governmental officials
-Power to enforce a tax
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NFP Exam 1 Questions And Answers |Latest
2025 | Guaranteed Pass.
Characteristics of NFP - Answer✔-receive contributions from resource providers that do not
expect a benefit in return
- do not provide goods and services at a profit
- do not have equity
- cash flows are different (might have more donations during Christmas and Thanksgiving that
need to last)
Characteristics of For Profit - Answer✔-goal is to maximize stock prices
-can change prices of goods and services to increase revenue
-know their customers and owners
501(c)3 organizations - Answer✔tax exempt and donors can give tax deductible donations from
federal income tax
501 (c) organization - Answer✔tax-exempt but donors cannot deduct donations from federal
income taxes
Public charties - Answer✔funded, operated, and monitored by the public at large rather than
by a limited number of donors (1/3 of support is from gov't or public support
1|P a g e
, ©BRIGHTSTARS 2025 ALL RIGHTS RESERVED 11:22 AM A+
Private foundation - Answer✔receives support from a small number of individuals or
corporations, and investment income rather than from the public at large
501(c)3 organizations - Answer✔public charities and private foundations
organizational test for exempt status - Answer✔-articles of incorporation must follow IRC
section 501
-cannot benefit private interests
-cannot try to influence legislation
Follow FASB - Answer✔non gov't NFP; mostly tax exempt
Follow FASB organizations - Answer✔-private universities, healthcare, religious, literary, service
organization
- Harvard, UNA Foundation
GASB - Answer✔governmental NFP; states and cities
Follow GASB - Answer✔-public universities, and hospitals
-UNA
Form 990 - Answer✔-NFP tax form
-annual compliance reporting
Governmental NFP organizations - Answer✔-Administer public affairs (municipality)
-Election of officers by governmental officials
-Power to enforce a tax
2|P a g e
