Which of the following statements is prepared by all not-for-profit organizations?

• A. Statement of financial position
• B. Statement of activities
• C. Cash flows statement
• D. Statement of functional expenses

Answer: (A)

The essential idea is that every not-for-profit organization must show its financial position at a specific point in time. The statement of financial position provides that snapshot by listing assets, liabilities, and net assets, with net assets typically categorized as unrestricted, temporarily restricted, and permanently restricted. This format is fundamental for all NPOs to communicate what resources the organization has and what it owes, which is why it is prepared by all not-for-profit organizations. Other statements—such as reports of changes in net assets, cash flows, or functional expenses—are important and commonly prepared, but their use can vary by entity's size, activities, and reporting choices, so they are not universally required in the same way.