Question

The required set of financial statements for all not-for-profit organizations includes each of the following statements except:

A) Statement of cash flows.
B) Statement of activities.
C) Statement of functional expenses.
D) Statement of financial position.

Answer 1

For not-for-profit organizations, the Statement of functional expenses is not a universally required financial statement, unlike the Statement of financial position, Statement of activities, and Statement of cash flows.

Step-by-step explanation:

The required set of financial statements for all not-for-profit organizations does not typically include a Statement of functional expenses. Such organizations are generally required to prepare a Statement of financial position, a Statement of activities, and a Statement of cash flows. The Statement of functional expenses is often used by certain types of not-for-profit entities, like health and welfare organizations, as recommended by the Financial Accounting Standards Board (FASB), but it is not a universally required statement.