CPA Exam Lab
Section 1: 30–40%1B2

Statement of Activities (NFP)

NFP financial statements look nothing like for-profit statements — no retained earnings, no income statement. AICPA tests whether you know which statements are required (statement of financial position, activities, and cash flows) and what goes where. The trap: candidates forget that NFPs must present functional expense information either on the face of the statements or in notes.

What AICPA Wants You to Know

  • 1Describe the overall structure of the NFP statement of activities
  • 2Classify revenues as with or without donor restrictions and explain how restrictions are released
  • 3Distinguish between program services and supporting activities in expense presentation
  • 4Apply the three required disclosures about liquidity and availability of resources
  • 5Explain how investment returns are reported on the statement of activities