ACNC reporting obligations and charity finances

This quiz is part of our charity governance online learning content.

It covers information about ACNC reporting obligations and charity finances. To learn more, see our guidance on:

Read each question and choose the answer you think is correct. If you get a question wrong, you can try again. If you answer every question correctly, you can download our ACNC reporting obligations and charity finances certificate to demonstrate your learning.

ACNC Reporting Obligations and Charity Finances Quiz

Question 1

True or false: All charities, aside from those registered with ORIC, must complete an Annual Information Statement, regardless of size and BRC status.

True

False

Tick icon Correct

All charities need to submit an Annual Information Statement. The only exception are charities registered with the Office of the Registrar of Indigenous Corporations (ORIC), which must continue to report to ORIC instead. Basic Religious Charities must submit an Annual Information Statement, but the financial questions are not mandatory.

Cross icon Incorrect

Please try again.

Question 2

How is charity size determined?

Annual income

Number of paid employees

Annual revenue

Tick icon Correct

Charity size is based on annual revenue, which is a component of total income. Small charities are those with annual revenue under $500,000, medium charities are those with annual revenue of $500,000 or more, but under $3 million, large charities are those with annual revenue of $3 million or more.

Cross icon Incorrect

Read our guidance about charity size, then please try again.

Question 3

Which charities are required by the ACNC to have their financial report audited? 

Small charities

Medium charities

Large charities

Tick icon Correct

Large charities must have their financial report audited.

Cross icon Incorrect

Small charities do not need to submit a financial report, unless their governing document specifically requires it.

Cross icon Incorrect

Medium charities must submit a financial report, but it can be either reviewed or audited.

Question 4

Is a charity allowed to make a profit or surplus?

No, being not-for-profit means a charity should never make a profit/be in surplus

No, being not-for-profit means a charity should aim to break even

Yes, making a profit or being in surplus occasionally is allowed

Yes, making a profit/being in surplus is good practice and allows for the financial viability of the charity

Tick icon Correct

A surplus is important for a charity's financial viability, and can help account for future expenses – both expected and unexpected.

Cross icon Incorrect

See our charity money myths about operating as a not-for-profit, then please try again.

Question 5

Which of the following is not a warning sign of financial difficulties in a charity?

Consistently having current assets higher than current liabilities

A history of financial losses in consecutive financial periods

Trouble producing accurate and timely information about your charity’s performance and financial position

Trouble paying staff on time

Difficulty paying bills for goods and services

Tick icon Correct

This is a positive sign for the charity’s financials.

Cross icon Incorrect

This is a warning sign of financial difficulties. Please try again.

Question 6

True or false: Knowing if your charity is a reporting entity helps you to determine what type of financial statements a charity must prepare.

True

False

Tick icon Correct

The type of financial statements a charity must prepare depends on whether it is classed as a reporting entity.

Cross icon Incorrect

Read our guidance about financial statements, then please try again.

Question 7

Which of the following factors may suggest that your charity is a reporting entity?

High level of separation of membership from management

The charity has a high level of economic or political importance or influence

High level of assets or revenue that is funded from government or a high number of employees

All of the above

Tick icon Correct

These are all factors that may suggest your charity is a reporting entity.

Cross icon This is one factor that may suggest that your charity is a reporting entity, but consider if there are others. Please try again.

Question 8

What is the difference between General Purpose Financial Statements (GPFS) and Special Purpose Financial Statements (SPFS)?

GPFS must comply with all applicable Australian Accounting Standards, whereas SPFS only have to comply with the mandatory Australian Accounting Standards outlined in the ACNC Regulations

SPFS must comply with all applicable Australian Accounting Standards, whereas GPFS only have to comply with the mandatory Australian Accounting Standards outlined in the ACNC Regulations

Tick icon Correct

Read our guidance about General and Special Purpose Financial Reports.

Cross icon Incorrect

Read our guidance about General and Special Purpose Financial Reports, then please try again.

Question 9

Which charities are required to report key management personnel remuneration in their annual financial report?

Small charities

Medium charities, if they prepare Special Purpose Financial Statements

Medium charities, if they prepare General Purpose Financial Statements, and large charities

Tick icon Correct

Unless an exemption applies, large charities, and medium charities that prepare General Purpose Financial Statements, must report key management personnel remuneration from the 2022 annual financial report.

Cross icon Incorrect

Read our guidance on key management personnel remuneration for more information, then please try again.

Question 10

Who of the following are related parties?

A charity’s Responsible People

A charity’s senior management

The close family members of a charity’s Responsible People and senior management

All of the above

Tick icon Correct

These are all examples of related parties.

Cross icon This is an example of a related party, but consider if there are others. Please try again.

Question 11

Which of the following is not a related party transaction?

A loan from a board member to the charity

A donation to the charity from a member of the public who has no connections to the charity

A board member’s accounting firm provides pro bono (free) accounting services to the charity

Renting charity office space on commercial terms from a board member’s close relative

Tick icon Correct

This is not a related party transaction.

Cross icon Incorrect

This is an example of a related party transaction. Please try again.

Question 12

True or false: All charities (aside from Basic Religious Charities) are required to report related party transactions.

True

False

Tick icon Correct

Read our guidance on reporting related party transactions for more information.

Cross icon Incorrect

Read our guidance on reporting related party transactions for more information.

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