Question

The local chapter of a CPA association, a not-for-profit organization, separate their expenses between program functions and support functions. Which of the following denote a proper classification of expenses? Program Expense Support Expense Continuing Education Programs on Sales/Use Tax Requirements Conference Expenses on Selecting Accounting Software Executive Director Salary Continuing Education Programs on Sales/Use Tax Requirements Fund Raising Expenses Continuing Education Programs Conference Expenses on Sales/Use Tax Fund Raising Expenses Executive Director Salary a. I. b. II. c. III. d. IV.

Answer 1

Answer -

Step - (1) - Information Given -

The local chapter of a CPA association, a not-for-profit organization, separate their expenses between program functions and support functions. Which of the following denote a proper classification of expenses?

	Program Expense	Support Expense
I.	Continuing Education Programs on Sales/Use Tax Requirements	Conference Expenses on Selecting Accounting Software
II.	Continuing Education Programs on Sales/Use Tax Requirements	Executive Director Salary
III.	Fund Raising Expenses	Continuing Education Programs Conference Expenses on Sales/Use Tax
IV.	Fund Raising Expenses	Executive Director Salary

.

Step - ( 2 ) - Analysis and Conclusion -

Not‑for‑profit organizations report Program service expenses and Support­ service expenses.

Program service expenses relate to goals and objectives of the organization.

Support service expenses encompass the costs of operating the organization and raising funds.

In the given case, (II) denote a proper classification of expenses

	Program Expense	Support Expense
II.	Continuing Education Programs on Sales/Use Tax Requirements	Executive Director Salary

Therefore, Option - (b) is Correct.