How Does the FASB Require Not-For-Profit Organizations to Report Expenses

question 48

Multiple Choice

How does the FASB require not-for-profit organizations to report expenses?

• A) Natural classification, such as salaries, rent, and supplies.
• B) Functional classification, such as program and support.
• C) Management has the option of reporting using natural classification or functional classification.
• D) Both natural classification and functional classification must be reported, one must be recognized on the face of the financial statements and one is reported in the notes to the financial statements.

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Definitions:

Ages

The length of time that a person or thing has existed.

Track and Field Team

A group of athletes who participate in track and field events, which may include running races, jumping, and throwing disciplines.

Case Prices

The cost of a product or commodity when purchased in bulk quantities for each case.

White Wines

A type of wine made from green or yellowish grapes, or from red grapes with the skin removed, and noted for a lighter flavor profile compared to red wines.