Practice Test Geeks(CNE) Certified Nonprofit Executive Practice Test
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Financial Management & Fundraising Flashcards

7 cards from real CNE practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Financial Management & Fundraising flashcards as text

  1. What is the primary function of a nonprofit's audit committee?

    Answer: To oversee the external audit process, review financial statements, and ensure auditor independence

    The audit committee provides board-level oversight of external auditors and financial reporting integrity without performing the audit itself.

  2. A nonprofit with a $2 million endowment uses a 5% spending policy. If the endowment grows to $2.4 million by year-end, what amount will be available under the spending policy for next year?

    Answer: $120,000 based on the ending balance

    A simple 5% spending policy applied to the ending balance of $2.4 million yields $120,000 for the next fiscal year.

  3. Which of the following best describes 'restricted revenue' under FASB ASC 958?

    Answer: Revenue subject to donor-imposed restrictions on timing or purpose

    Donor-imposed restrictions — not board designations — create restricted net assets under FASB accounting standards.

  4. A major gifts officer cultivates a prospect over 18 months before asking for a $500,000 gift. This fundraising approach is best characterized as:

    Answer: Relationship-based or moves management fundraising

    Moves management is a structured relationship-building process that guides major gift prospects through stages of identification, cultivation, solicitation, and stewardship.

  5. Which IRS form must nonprofits use to report unrelated business income (UBI) and pay any taxes owed on that income?

    Answer: Form 990-T

    Form 990-T is filed separately from Form 990 to report unrelated business taxable income and calculate any UBIT owed.

  6. A nonprofit executive is reviewing a grant agreement that requires 'matching funds' on a 1:2 basis. If the grant is $100,000, how much must the nonprofit raise from other sources?

    Answer: $200,000

    A 1:2 match means the nonprofit must contribute $2 for every $1 of grant funds, requiring $200,000 in matching contributions for a $100,000 grant.

  7. What is the key difference between a 'conditional' and an 'unconditional' contribution under nonprofit accounting standards?

    Answer: A conditional contribution depends on a future uncertain event occurring before revenue is recognized

    Conditional contributions include a barrier that must be overcome before the recipient has an unconditional right to the gift, so revenue recognition is deferred until the condition is met.