Which of the following statements about the reporting of functional expenses is not true?

• 1.A statement of functional expenses is now required of all private not-for-profit entities.

• 2 Functional expenses are divided between program services and supporting services.

• 3 Functional expenses can be reported as a footnote rather than as a separate statement of functional expenses.

• 4 Functional expenses can be reported within the statement of activities rather than as a separate statement of functional expenses.

correct Answer: A statement of functional expenses is now required of all private not-for-profit entities.