Which of the following statements is regarding fund accounting for not-for-profit organizations (NFPs)?

Question

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Fund accounting is commonly used by NFPs to track the use of funds for specific purposes, such as donations, grants, or endowments. This type of accounting can help to facilitate reporting to donors, as well as ensure compliance with legal and regulatory requirements. While fund accounting may not be required for internal purposes, it can still be a useful tool for managing financial resources and tracking performance. FASB has not replaced fund accounting with the three classes of net assets, but rather requires NFPs to disclose information about their net assets and how they are restricted or designated for specific purposes.

Which of the Following Statements Is Regarding Fund Accounting for Not-For-Profit