Rule: Not-for-profit corporations are required to produce the following financial statements:
Not-for-profit corporations are generally encouraged, but not required, to produce a Statement of Functional Expenses. Voluntary Health and Welfare organizations, a subset of all not-for-profit entities, are required to present a Statement of Functional Expenses. Choice "C" is correct. Not-for-profit organizations are required to present a statement of cash flows along with other financial statements, as described in the rule above.Choice "a" is incorrect. The Statement of Changes in Financial Position is no longer used by not-for-profit organizations.
Choice "d" is incorrect. Not-for-profits do not account for fund balances in financial statements issued for external use and therefore do not produce a Statement of Changes in Fund Balance.
Choice "b" is incorrect. Not-for-profits do not account for fund balances in financial statements issued for external use and therefore do not produce a Statement of Revenues, Expenses and Changes in Fund Balance.
