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Which of the Following Statements Is True Regarding Fund Accounting

Question 36

Multiple Choice

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


A) Fund accounting may provide a good mechanism for facilitating reporting to donors for restricted grants.
B) Fund accounting may be used by NPOs for external purposes,but not internal purposes.
C) Fund accounting is not allowed.
D) SFAS Nos.116 and 117 method of reporting three classes of net assets (unrestricted,temporarily restricted,and permanently restricted) replaces fund accounting for both internal and external reporting purposes.

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