Question

The purpose of a statement of functional expenses is to

a. Report on the net income of each program compared to that of supporting the programs.
b. Report on program expenses and supporting expenses.
c. Report on the cash flows of each program and that of supporting the programs.
d. Report on the natural expenses (object-of-expense), as well as program and support functions expenses.

Answer 1

The purpose of a statement of functional expenses is to report on program expenses and supporting expenses. It helps organizations analyze and allocate resources effectively.

Step-by-step explanation:

The purpose of a statement of functional expenses is to report on program expenses and supporting expenses. It provides a breakdown of the expenses related to each program and the supporting functions. This statement helps organizations analyze and understand their costs and allocate resources effectively. For example, a nonprofit organization may use a statement of functional expenses to analyze the cost of running different programs and make informed decisions about resource allocation.