Reference no: EM132949046

Problem 1: Which of the following statements about the reporting of functional expenses is not true?

Multiple Choice

Option 1: A statement of functional expenses is now required of all private not-for-profit entities.
Option 2: Functional expenses are divided between program services and supporting services.
Option 3: Functional expenses can be reported as a footnote rather than as a separate statement of functional expenses.
Option 4: Functional expenses can be reported within the statement of activities rather than as a separate statement of functional expenses.

A private not-for-profit entity has the following expenses for the current year.

Research to cure disease $60,000

Fundraising costs 70,000

Work to help individuals with disabilities 40,000

Administrative salaries 90,000

Problem 2: How should the not-for-profit entity report these costs?

Multiple Choice

Option 1: Program service expenses of $100,000 and supporting service expenses of $160,000
Option 2: Program service expenses of $160,000 and supporting service expenses of $100,000
Option 3: Program service expenses of $170,000 and supporting service expenses of $90,000
Option 4: Program service expenses of $190,000 and supporting service expenses of $70,000