What is the nonprofit balance sheet commonly called?

• A. Statement of financial position
• B. Balance of funds
• C. Profit and loss statement
• D. Cash flow statement

Answer: (A)

In nonprofit accounting, the balance sheet is a snapshot of what the organization owns and owes at a specific date, shown as assets, liabilities, and net assets. It is commonly called the statement of financial position because it presents the organization’s financial position at that point in time, with net assets replacing what for for-profit entities would be owners’ equity. The phrasing emphasizes the current status of resources and obligations rather than flows over a period.

The other reports cover different things: a profit and loss statement (often called the statement of activities) shows revenues and expenses over a period; a cash flow statement tracks cash inflows and outflows. “Balance of funds” isn’t a standard title in nonprofit reporting.