Question

Nongovernmental not-for-profit organizations (NFPs) should follow generally accepted accounting principles promulgated by which standards-setting body?

A) Financial Accounting Standards Board.
B) American Institute of Certified Public Accountants.
C) Government Accountability Office.
D) Governmental Accounting Standards Board.

Answer 1

Nongovernmental not-for-profit organizations (NFPs) should follow generally accepted accounting principles promulgated by the Financial Accounting Standards Board (FASB). Compliance with FASB's accounting principles ensures transparency, consistency, and comparability in the financial statements of NFPs.

Step-by-step explanation:

Nongovernmental not-for-profit organizations (NFPs) should follow generally accepted accounting principles promulgated by the Financial Accounting Standards Board (FASB).

FASB is the standards-setting body responsible for establishing and improving accounting standards in the United States. They provide guidance on financial reporting for both for-profit and not-for-profit organizations, including NFPs.

Compliance with FASB's accounting principles ensures transparency, consistency, and comparability in the financial statements of NFPs. By following these principles, NFPs can provide accurate and reliable financial information to stakeholders, including donors, grantors, and the public.