The FASB Requires That All Not-For-Profit Organizations Report Expenses

question 60

Multiple Choice

The FASB requires that all not-for-profit organizations report expenses

• A) By object.
• B) By function.
• C) By natural classification.
• D) By budget code.

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Definitions:

Variable Budget

A financial plan that adjusts for changes in the volume of activity, allowing for flexible cost controls depending on actual performance.

Management by Exception

A management strategy where only significant deviations from set standards are brought to the attention of management.

Variances

The differences between planned or expected financial outcomes and the actual results achieved.

Fixed Budget

A budget that outlines expected revenues and expenses over a specific period, which does not adjust in response to changes in business activity levels.