QUESTION 2

Which of the following statements regarding budgets of not-for-profit organizations is true?

1. Not-for-profit organization budgets are legal documents reflecting plans for spending resources.

2. A not-for-profit entity may choose to prepare a budget to demonstrate accountability to its resource providers, such as donors and grantors.

3. The budgeting approaches used for governments generally cannot be used by not-for-profit entities.

4. All of the above statements are true.