Final answer:
The correct answer is option 1. The Financial Accounting Standards Board (FASB) is responsible for setting the GAAP for nongovernmental, not-for-profit organizations. Neither AICPA, SEC, nor IRS set these accounting standards.
Step-by-step explanation:
The organization responsible for setting the Generally Accepted Accounting Principles (GAAP) for nongovernmental, not-for-profit organizations is the Financial Accounting Standards Board (FASB). The FASB is an independent, private-sector body that establishes financial accounting and reporting standards in the United States.
While the American Institute of Certified Public Accountants (AICPA) contributes to the development of GAAP through auditing standards and recommendations, it does not have the authority to set GAAP. The Securities and Exchange Commission (SEC) oversees public companies and their adherence to GAAP but does not set GAAP for nongovernmental, not-for-profit organizations.
Meanwhile, the Internal Revenue Service (IRS) is the federal agency responsible for enforcing tax laws and collecting taxes, but it does not set accounting standards. Therefore, the correct option for who sets the GAAP for nongovernmental, not-for-profit organizations is 1) FASB.