[harris016]

I am having a difficult time with Becker telling the difference between the two types of expenses.

The statement of functional expenses is mandatory for health and welfare, but optional for any other.

When a question is asked which categories would the following expenses go into would you choose between the 3 statement of activities expenses ( program/support) and the statement of functional expenses (program/fundraising/management and general) based on whether or not it is a health and welfare or not?

For example I had a question about a museum which had a fundraising expenses of $3,000 and the answer said it was a support expense.

I am assuming it is not a fundraising expense because the museum would not have a statement of functional expenses. Correct??

[M.O.D.]

You should review an advanced accounting or govt textbook to see the actual statements. They are not that difficult to comprehend when you have to fill one out.

That statement (functional expenses) is completely separate (and additional requirement) from the statement of activities of a non-profit. Ie. a health organization needs both statements.

Fundraising is support, not program, and this is true for all non-profits. Support and program expenses are two very different categories: one is staffed by charlatans, the other by saints, 🙂 according to NFP theory, thus the separate reporting.

BA Mathematics, UC Berkeley
Certificates in CPA and EA preparation, College of San Mateo
CMA I 420, II 470
FAR 91, AUD Feb 2015 (Gleim self-study)

[harris016]

I understand the difference between the categories of expenses. I am talking about strictly for exam questions.

For instance under the functional expense there is a category called “fundraising expenses” which I would think “fundraising” expenses would go, but only if they are asking for where the expense would go on a functional statement.

My question is just for the exam, if the question does not say functional statement then don't put it in a functional expense category

[M.O.D.]

I don't think you understand the matrix of a functional vs natural expenses health statement, and the regular activities statement. Both have functions in them, but the matrix has more (additional) detail.

You have to know the two separate activities statements.

Although Gleim had an example, I had to go to my advanced textbook for better examples

Fill out both for yourself, ie copy the ones in the book.

As for as the exam questions, the language is exactly as in the books.

BA Mathematics, UC Berkeley
Certificates in CPA and EA preparation, College of San Mateo
CMA I 420, II 470
FAR 91, AUD Feb 2015 (Gleim self-study)

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