D is corrent. Nongovernmental, not-for-profit entities should prepare the following financial statements:
| 1. | Statement of financial position |
| 2. | Statement of activities |
| 3. | Statement of cash flows |
A is incorrect because a statement of changes in fund balances is not required but a statement of activities is required.
B is incorrect because a statement of activities is required.
C is incorrect because a statement of changes is fund balances is not required.
