©BRIGHTSTARS 2025 ALL RIGHTS RESERVED 11:22 AM A+
NFP Accounting Final Exam Questions And
Answers |Latest 2025 | Guaranteed Pass.
Which of the following authoritative standards-setting bodies would establish accounting
standards for a not-for-profit entity, such as the City Symphony, that receives federal grants as
well as revenue from ticket sales? - Answer✔Financial Accounting Standards Board (FASB).
Assets minus liabilities for a state or local government could be described with which of the
following account names? - Answer✔Net position
The Financial Accounting Standards Board's (FASB) objectives of financial reporting for not-for-
profit organizations includes which of the following? - Answer✔Assessing management
stewardship and performance.
B. Assessing management stewardship and performance. - Answer✔Business Environment and
Concepts (BEC).
A water and sewer utility that provides water treatment services to a three-county area in the
state is funded primarily by local tax dollars. This year, the utility received a federal grant to
monitor water purity. The category that best describes this utility is a: - Answer✔Special
purpose government
In which part of the CPA exam would you expect to find questions about tax-exempt
organizations? - Answer✔Regulation REG
1|P a g e
, ©BRIGHTSTARS 2025 ALL RIGHTS RESERVED 11:22 AM A+
Which of the following is a true statement about accounting standard-setting bodies? -
Answer✔The FASB and GASB are administratively supported by the Financial Accounting
Foundation; the FASAB draws its support from the federal government
Financial reporting for state and local governments is guided by the GASB's Concept Statement
No. 1 which stresses: - Answer✔Accountability
The reason accounting for governments and not-for-profit organizations is different than
accounting for businesses is primarily that both governments and not-for-profit organizations: -
Answer✔A. Have no owners seeking a return on their investment.
The Federal Accounting Standards Advisory Board's (FASAB) objectives of financial reporting for
federal agencies includes assessing all the following except: - Answer✔Inter-period equity
Which of the following is not one of the core skills area in the new CPA exam scheduled to start
in 2024 as part of the American Institute of Certified Public Accountants (AICPA) and National
Association of State Boards of Accountancy's (NASBA) CPA Evolution initiative? - Answer✔D.
Managerial Cost Accounting.
The Financial Standards Board's (FASB) financial reporting model for not-for-profit
organizations differs from that of for-profit businesses because not-for-profit organizations: -
Answer✔D. Have different missions and stakeholders.
Which of the following organizations helps to identify accounting and reporting issues to place
on the technical agenda of the board that sets state and local government GAAP? -
Answer✔Government Accounting Standards Advisory Council (GASAC)
Which of the following is ordinarily considered one of the major characteristics distinguishing
governments from nongovernmental, not-for-profit organizations? - Answer✔Governments
have the power to tax citizens.
2|P a g e
, ©BRIGHTSTARS 2025 ALL RIGHTS RESERVED 11:22 AM A+
Which of the following organizations is the best source of information about differences across
states in educational and experince requirements to become a CPA? - Answer✔C. National
Association of State Boards of Accountancy (NASBA).
Which of the following organizations sets auditing standards for its members? - Answer✔B.
American Institute of Certified Public Accountants (AICPA).
A characteristic activity of a local public school system that distinguishes it from
nongovernmental/not-for-profit organizations, that leads it to use generally accepted
accounting principles established by the GASB rather than the FASB, is: - Answer✔D. Benefitting
from taxes levied on residents of a community
Which of the following authoritative standards-setting bodies would establish accounting
standards for a private, not-for-profit museum that is entirely funded by donations and
membership fees? - Answer✔C. Financial Accounting Standards Board (FASB).
Tax-exempt, not-for-profit organizations are described using several different terms. The
abbreviation for a term that is used in an international context for not-for-profit,
nongovernmental organizations is: - Answer✔NGO
The concept in state and local government financial reporting that describes assessing whether
current-year revenues are sufficient to cover current-year expenses is called: - Answer✔A.
Inter-period equity.
Which of the following activities regularly carried on by an exempt organization will not result
in unrelated business income (UBI)? - Answer✔The sale by a professional trade association of
publications used as course materials for the association's seminars, which are oriented toward
its members.
Which of the following statements about private foundations is not true? - Answer✔C. They
generally have a large number of donors who make relatively small contributions.
3|P a g e
NFP Accounting Final Exam Questions And
Answers |Latest 2025 | Guaranteed Pass.
Which of the following authoritative standards-setting bodies would establish accounting
standards for a not-for-profit entity, such as the City Symphony, that receives federal grants as
well as revenue from ticket sales? - Answer✔Financial Accounting Standards Board (FASB).
Assets minus liabilities for a state or local government could be described with which of the
following account names? - Answer✔Net position
The Financial Accounting Standards Board's (FASB) objectives of financial reporting for not-for-
profit organizations includes which of the following? - Answer✔Assessing management
stewardship and performance.
B. Assessing management stewardship and performance. - Answer✔Business Environment and
Concepts (BEC).
A water and sewer utility that provides water treatment services to a three-county area in the
state is funded primarily by local tax dollars. This year, the utility received a federal grant to
monitor water purity. The category that best describes this utility is a: - Answer✔Special
purpose government
In which part of the CPA exam would you expect to find questions about tax-exempt
organizations? - Answer✔Regulation REG
1|P a g e
, ©BRIGHTSTARS 2025 ALL RIGHTS RESERVED 11:22 AM A+
Which of the following is a true statement about accounting standard-setting bodies? -
Answer✔The FASB and GASB are administratively supported by the Financial Accounting
Foundation; the FASAB draws its support from the federal government
Financial reporting for state and local governments is guided by the GASB's Concept Statement
No. 1 which stresses: - Answer✔Accountability
The reason accounting for governments and not-for-profit organizations is different than
accounting for businesses is primarily that both governments and not-for-profit organizations: -
Answer✔A. Have no owners seeking a return on their investment.
The Federal Accounting Standards Advisory Board's (FASAB) objectives of financial reporting for
federal agencies includes assessing all the following except: - Answer✔Inter-period equity
Which of the following is not one of the core skills area in the new CPA exam scheduled to start
in 2024 as part of the American Institute of Certified Public Accountants (AICPA) and National
Association of State Boards of Accountancy's (NASBA) CPA Evolution initiative? - Answer✔D.
Managerial Cost Accounting.
The Financial Standards Board's (FASB) financial reporting model for not-for-profit
organizations differs from that of for-profit businesses because not-for-profit organizations: -
Answer✔D. Have different missions and stakeholders.
Which of the following organizations helps to identify accounting and reporting issues to place
on the technical agenda of the board that sets state and local government GAAP? -
Answer✔Government Accounting Standards Advisory Council (GASAC)
Which of the following is ordinarily considered one of the major characteristics distinguishing
governments from nongovernmental, not-for-profit organizations? - Answer✔Governments
have the power to tax citizens.
2|P a g e
, ©BRIGHTSTARS 2025 ALL RIGHTS RESERVED 11:22 AM A+
Which of the following organizations is the best source of information about differences across
states in educational and experince requirements to become a CPA? - Answer✔C. National
Association of State Boards of Accountancy (NASBA).
Which of the following organizations sets auditing standards for its members? - Answer✔B.
American Institute of Certified Public Accountants (AICPA).
A characteristic activity of a local public school system that distinguishes it from
nongovernmental/not-for-profit organizations, that leads it to use generally accepted
accounting principles established by the GASB rather than the FASB, is: - Answer✔D. Benefitting
from taxes levied on residents of a community
Which of the following authoritative standards-setting bodies would establish accounting
standards for a private, not-for-profit museum that is entirely funded by donations and
membership fees? - Answer✔C. Financial Accounting Standards Board (FASB).
Tax-exempt, not-for-profit organizations are described using several different terms. The
abbreviation for a term that is used in an international context for not-for-profit,
nongovernmental organizations is: - Answer✔NGO
The concept in state and local government financial reporting that describes assessing whether
current-year revenues are sufficient to cover current-year expenses is called: - Answer✔A.
Inter-period equity.
Which of the following activities regularly carried on by an exempt organization will not result
in unrelated business income (UBI)? - Answer✔The sale by a professional trade association of
publications used as course materials for the association's seminars, which are oriented toward
its members.
Which of the following statements about private foundations is not true? - Answer✔C. They
generally have a large number of donors who make relatively small contributions.
3|P a g e
