One of the Operating Principles of Cooperatives Is "Operation at Cost

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The Answer is In most cases, a cooperative's net income is distributed to individual members in proportion to the volume of business that they have done with the cooperative. A cooperative may choose to retain profits rather than pay them out as patronage returns, but when it does, it normally must pay corporate income tax just as any corporation must. The obligation to return profits to members is a primary factor that separates cooperatives from other forms of business. Noncooperatives are not so obligated and, after paying any tax on profits that may be due, will return profits to the owners of the business in proportion to the owners' investments, or will keep the profits in the business as retained earnings for future growth.

One of the Operating Principles of Cooperatives Is "Operation at Cost

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One of the Operating Principles of Cooperatives Is "Operation at Cost

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Correct Answer:
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