FAR 2 : Nongovernmental - not for profit entities

Question 1

What is the purpose of a statement of financial position?

Answer 1

-Showcasing financial health

-Resource management - shows how it manages resources essential for stakeholders, donors, grantors, members, and governing bodies.

-Compliance and accountability - demonstrates compliance with financial regulations and accountability in the stewardship of resources.

Question 2

What are Net assets without donor restrictions?

Answer 2

• Funds that aren’t subject to donor-imposed restrictions.

Question 3

What is the purpose of a statement of Activities?

Answer 3

In essence, the Statement of Activities is central to demonstrating
how an NFP has managed its financial resources over a particular
period. It highlights not just the financial outcomes but also the
effectiveness of the organization in advancing its mission through
prudent financial management.