Final answer:
The Financial Accounting Standards Board (FASB) is the standard-setting body for private not-for-profit organizations, which should use the accrual basis of accounting. Thus, the answer is C) FASB & Accrual.
Step-by-step explanation:
The standard-setting body for private not-for-profit organizations is the Financial Accounting Standards Board (FASB). The basis of accounting that private not-for-profit organizations should use is accrual accounting. Therefore, the correct answer to the question is C) FASB & Accrual. Under the accrual basis of accounting, revenues are recognized when earned and expenses are recognized when incurred, regardless of when cash is exchanged, which provides a more accurate financial picture for users of the financial statements. In contrast, the Governmental Accounting Standards Board (GASB) sets standards for state and local governments, which can use either the accrual or the modified accrual basis of accounting, depending on the circumstances.