Question 1

Not-for-profit corporations cannot lobby or attempt to influence legislation or politicians.

Accepted Answer

A) True 
 B)False

Question 2

Public disclosure rules require that a tax-exempt not-for-profit organization:

Accepted Answer

A)  Make available a copy of its Form 990 to the public for a period of up to three years. 
B)  Post a copy of its articles of incorporation and by-laws on its website. 
C)  Provide a copy of the minutes to all board meetings to any person who requests the minutes within 90 days of the board meeting. 
D)  Make available a copy of its Form 990-T, but not its Form 990, to the public for a period of up to two years. 
A)  Make available a copy of its Form 990 to the public for a period of up to three years. 
B)  Post a copy of its articles of incorporation and by-laws on its website. 
C)  Provide a copy of the minutes to all board meetings to any person who requests the minutes within 90 days of the board meeting. 
D)  Make available a copy of its Form 990-T, but not its Form 990, to the public for a period of up to two years.

Question 3

Unrelated business income tax is reported on the Form 990.

Accepted Answer

A) True 
 B)False

Question 4

Not-for-profit organizations are required to file audited financial statements with all states in which they solicit contributions.

Accepted Answer

A) True 
 B)False

Question 5

A disqualified person is a person who has violated and been sanctioned under the Internal Revenue Code.

Accepted Answer

A) True 
 B)False

Question 6

The organization Shelter the Needy is completing its Form 990 and it is trying to determine if it has unrelated business income on which it must pay taxes. Which of the following would be subject to unrelated business income taxes?

Accepted Answer

A)  The Shelter sold art work it had received as a donation. 
B)  Volunteers raised several thousand dollars in a marathon sponsored for the benefit of the Shelter. 
C)  The Shelter earned revenues from the self-service laundry facilities it provides for the benefit of tenants of its low-income temporary housing facilities. 
D)  None of the items listed would be subject to unrelated business income taxes. 
A)  The Shelter sold art work it had received as a donation. 
B)  Volunteers raised several thousand dollars in a marathon sponsored for the benefit of the Shelter. 
C)  The Shelter earned revenues from the self-service laundry facilities it provides for the benefit of tenants of its low-income temporary housing facilities. 
D)  None of the items listed would be subject to unrelated business income taxes.

Question 7

For each of the following definitions, select the key term from the list that best matches by placing the appropriate terms.
A. Unrelated business income
B. Public charity
C. Charitable solicitation
D. Lobbying
E. Debt financed income
F. Private foundation
G. Propaganda
 . A not-for-profit exempt under IRC Sec. 501(c)(3) that receives most of its support from a small number of donors or investment income than it does from the public at large.
________ 2. A direct request for credit or financial assistance that will be used for the 501(c)(3)'s mission.
________ 3. Information that is skewed toward a particular belief with little basis in fact.
________ 4. Gross income from a trade or business regularly carried on by a tax-exempt organization.
________ 5. Contacting elected officials to encourage specific legislative action.

Accepted Answer

1. F, 2. C

Question 8

For each of the following performance indicators, select the type of ratio from the list that best matches by placing the appropriate ratios.
A. Liquidity
B. Going concern
C. Capital structure
D. Program effectiveness
E. Efficiency
F. Leverage and debt coverage
G. Fund-raising ratio
H. Fund-raising efficiency
I. Investment performance
 . Are earnings on investments on target?
________ 2. What percentage of contributions remains after deducting the cost of raising the contributions?
________ 3. Does the organization rely more on debt or net assets to finance its operations?
________ 4. Is an appropriate amount spent on accomplishing the organization's program goals?
________ 5. Are revenues sufficient to cover expenses?

Accepted Answer

1. I, 2. G

Question 9

The success of a not-for-profit organization is measured primarily by the amount of profits generated by the organization's activities.

Accepted Answer

A) True 
 B)False

Question 10

Political parties and campaign committees can qualify for tax-exempt status.

Accepted Answer

A) True 
 B)False

Question 11

A good measure of whether a not-for-profit organization is operating its programs efficiently is:

Accepted Answer

A)  Fund-raising expenses as a percentage of public support. 
B)  The ratio of program expenses to number of clients served. 
C)  Total revenues divided by total expenses. 
D)  Percentage of program expenses to total expenses. 
A)  Fund-raising expenses as a percentage of public support. 
B)  The ratio of program expenses to number of clients served. 
C)  Total revenues divided by total expenses. 
D)  Percentage of program expenses to total expenses.

Question 12

Which of the following would not be required under not-for-profit incorporation laws?

Accepted Answer

A)  Appointment of a board of directors. 
B)  Establishment of by-laws. 
C)  A clearly stated purpose for the organization. 
D)  Application for 501(c)(3) status. 
A)  Appointment of a board of directors. 
B)  Establishment of by-laws. 
C)  A clearly stated purpose for the organization. 
D)  Application for 501(c)(3) status.

Question 13

A program effectiveness ratio is helpful in assessing whether a not-for-profit is using its resources to accomplish its mission or goals.

Accepted Answer

A) True 
 B)False

Question 14

A state has the obligation to monitor and regulate a not-for-profit (NFP) organization because it granted the NFP tax-exempt status through the not-for-profit corporation laws.

Accepted Answer

A) True 
 B)False

Question 15

Not-for-profit organizations can take which of the following organizational forms?

Accepted Answer

A)  Nongovernmental. 
B)  Governmental. 
C)  Business. 
D)  Both governmental and nongovernmental are acceptable organizational forms. 
A)  Nongovernmental. 
B)  Governmental. 
C)  Business. 
D)  Both governmental and nongovernmental are acceptable organizational forms.

Question 16

The local Kennel Club is a not-for-profit organization with gross receipts of $23,500 for the current tax year. Under the Internal Revenue Service Code, the Kennel Club would be required to file which of the following forms for the tax year?

Accepted Answer

A)  Form 990-N. 
B)  Form 990-EZ. 
C)  Form 990-PF. 
D)  Since its gross receipts are less than $25,000 it need not file with the Internal Revenue Service. 
A)  Form 990-N. 
B)  Form 990-EZ. 
C)  Form 990-PF. 
D)  Since its gross receipts are less than $25,000 it need not file with the Internal Revenue Service.

Question 17

Not-for-profit organizations are so diverse in nature that it is not feasible to find benchmarks with which to compare their financial and operating performance.

Accepted Answer

A) True 
 B)False

Question 18

Income, a not-for-profit organization, earns from a rental property on which it has a mortgage is subject to unrelated business income tax.

Accepted Answer

A) True 
 B)False

Question 19

A good measure of whether a not-for-profit organization is "liquid" and can meet its short-term obligations is:

Accepted Answer

A)  Percentage of program expenses to total expenses. 
B)  Total revenues divided by total expenses. 
C)  Current assets divided by current liabilities. 
D)  Percentage of unrestricted net assets to operating expenses. 
A)  Percentage of program expenses to total expenses. 
B)  Total revenues divided by total expenses. 
C)  Current assets divided by current liabilities. 
D)  Percentage of unrestricted net assets to operating expenses.

Not-for-profit corporations cannot lobby or attempt to influence legislation or politicians.

Public disclosure rules require that a tax-exempt not-for-profit organization:

Unrelated business income tax is reported on the Form 990.

Not-for-profit organizations are required to file audited financial statements with all states in which they solicit contributions.

A disqualified person is a person who has violated and been sanctioned under the Internal Revenue Code.

The organization Shelter the Needy is completing its Form 990 and it is trying to determine if it has unrelated business income on which it must pay taxes. Which of the following would be subject to unrelated business income taxes?

The success of a not-for-profit organization is measured primarily by the amount of profits generated by the organization's activities.

Political parties and campaign committees can qualify for tax-exempt status.

A good measure of whether a not-for-profit organization is operating its programs efficiently is:

Which of the following would not be required under not-for-profit incorporation laws?

A program effectiveness ratio is helpful in assessing whether a not-for-profit is using its resources to accomplish its mission or goals.

A state has the obligation to monitor and regulate a not-for-profit (NFP) organization because it granted the NFP tax-exempt status through the not-for-profit corporation laws.

Not-for-profit organizations can take which of the following organizational forms?

The local Kennel Club is a not-for-profit organization with gross receipts of $23,500 for the current tax year. Under the Internal Revenue Service Code, the Kennel Club would be required to file which of the following forms for the tax year?

Not-for-profit organizations are so diverse in nature that it is not feasible to find benchmarks with which to compare their financial and operating performance.

Income, a not-for-profit organization, earns from a rental property on which it has a mortgage is subject to unrelated business income tax.

A good measure of whether a not-for-profit organization is "liquid" and can meet its short-term obligations is:

Introduction to Accounting and Financial Reporting for Government and Not-for-Profit Entities

Principles of Accounting and Financial Reporting for State and Local Governments

Governmental Operating Statement Accounts; Budgetary Accounting

Accounting for Governmental Operating Activities–Illustrative Transactions and Financial Statements

Accounting for General Capital Assets and Capital Projects

Accounting for General Long-Term Liabilities and Debt Service

Accounting for the Business-type Activities of State and Local Governments

Accounting for Fiduciary Activities—Custodial and Trust Funds

Financial Reporting of State and Local Governments

Analysis of Government Financial Performance

Auditing of Government and Not-for-Profit Organizations

Budgeting and Performance Measurement

Accounting for Not-for-Profit Organizations

Accounting for Colleges and Universities

Accounting for Health Care Organizations

Accounting and Reporting for the Federal Government

Filters

Exam 13: Not-for-Profit Organizations—Regulatory, Taxation, and Performance Issues

Not-for-profit corporations cannot lobby or attempt to influence legislation or politicians.

Public disclosure rules require that a tax-exempt not-for-profit organization:

Unrelated business income tax is reported on the Form 990.

Not-for-profit organizations are required to file audited financial statements with all states in which they solicit contributions.

A disqualified person is a person who has violated and been sanctioned under the Internal Revenue Code.

The organization Shelter the Needy is completing its Form 990 and it is trying to determine if it has unrelated business income on which it must pay taxes. Which of the following would be subject to unrelated business income taxes?

The success of a not-for-profit organization is measured primarily by the amount of profits generated by the organization's activities.

Political parties and campaign committees can qualify for tax-exempt status.

A good measure of whether a not-for-profit organization is operating its programs efficiently is:

Which of the following would not be required under not-for-profit incorporation laws?

A program effectiveness ratio is helpful in assessing whether a not-for-profit is using its resources to accomplish its mission or goals.

A state has the obligation to monitor and regulate a not-for-profit (NFP) organization because it granted the NFP tax-exempt status through the not-for-profit corporation laws.

Not-for-profit organizations can take which of the following organizational forms?

The local Kennel Club is a not-for-profit organization with gross receipts of $23,500 for the current tax year. Under the Internal Revenue Service Code, the Kennel Club would be required to file which of the following forms for the tax year?

Not-for-profit organizations are so diverse in nature that it is not feasible to find benchmarks with which to compare their financial and operating performance.

Income, a not-for-profit organization, earns from a rental property on which it has a mortgage is subject to unrelated business income tax.

A good measure of whether a not-for-profit organization is "liquid" and can meet its short-term obligations is:

Introduction to Accounting and Financial Reporting for Government and Not-for-Profit Entities

Principles of Accounting and Financial Reporting for State and Local Governments

Governmental Operating Statement Accounts; Budgetary Accounting

Accounting for Governmental Operating Activities–Illustrative Transactions and Financial Statements

Accounting for General Capital Assets and Capital Projects

Accounting for General Long-Term Liabilities and Debt Service

Accounting for the Business-type Activities of State and Local Governments

Accounting for Fiduciary Activities—Custodial and Trust Funds

Financial Reporting of State and Local Governments

Analysis of Government Financial Performance

Auditing of Government and Not-for-Profit Organizations

Budgeting and Performance Measurement

Accounting for Not-for-Profit Organizations

Accounting for Colleges and Universities

Accounting for Health Care Organizations

Accounting and Reporting for the Federal Government

Filters