Nonprofit Financial Literacy

Which of the following are common financial statements used by Nonprofit Organizations:

• Statement of Activities

• Statement of Functional Expenses

• Statement of Financial Position

• Statement of Cash Flow

Since Nonprofit Organizations are tax exempt, they do not have to file an annual tax form to the IRS.

• TRUE

• FALSE

Which of the following statements about the IRS form 990 is true?

• The Form 990-N e-Postcard may be used by organizations with less than $50,000 of gross income

• If the organization fails to file an appropriate form 990 for 3 consecutive years, it will automatically lose its tax-exempt status

• Form 990 must be made available for public inspection

• All of the above

Which of the following sources of income are considered a contribution (donation)?

• A gift accompanied by restrictions as to its use

• Program service revenue

• Interest income

• None of the above

If a Nonprofit Organization receives unrestricted revenue the money can be allocated toward projects, operations, and any other expenses chosen by the Nonprofit.

• TRUE

• FALSE

A nonprofit budget must include all the following except:

• Detailed expected costs of organization

• Detailed expected revenues of organization

• Specific budget time period

• A balanced budget

The Statement of Financial Position provides:

• A snapshot of the assets, liabilities, and equity of a Nonprofit Organization at of a specific date

• All the revenue earned, expenses incurred, and changes in net assets within the fiscal year

A statement of cash flow shows you how money is coming in and going out of a Nonprofit Organization. The statement of cash flow has three sections. Which below is NOT one of the three sections?

• Operating activities

• Estimating and costing activities

• Investing activities

• Financing activities

A Nonprofit Organization's Board of Directors are responsible for

reviewing and approving the agency budget.

• TRUE

• FALSE

Program Expense Ratio is the percentage of expenses a nonprofit is spending on its core mission. What is the minimum ratio to be considered favorable according to Charity Navigator (https://www.charitynavigator.org)?

• 70%

• 50%

• 85%

• 75%