A Not-For-Profit University Maintained as Endowment of $800,000, the Income

question 38

Multiple Choice

A not-for-profit university maintained as endowment of $800,000, the income of which was restricted for an annual conference on international relations.In a particular year, the market value of the endowment increased by $80,000.The university held a conference on international relations at a cost of $86,000.The university should report

• A)No revenue and unrestricted expenses of $86,000
• B)Unrestricted revenues of $80,000 and unrestricted expenses of $86,000
• C)Temporarily restricted revenues of $80,000, temporarily restricted expenses of $80,000 and unrestricted expenses of $6,000
• D)Permanently restricted revenues of $80,000 and unrestricted expenses of $86,000

Recognize the potential for leadership development through learning and experience.

Understand the categorization of properties for tax purposes based on their use.

Identify the correct IRS form(s) for reporting income from property rental and royalties.

Comprehend the concept of material participation and its impact on rental activities and tax treatment.

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Definitions:

Indifference Map

A collection of indifference curves that represent a consumer’s preferences for various combinations of goods, illustrating how those preferences change with different bundles.

Marginal Rate

The marginal rate typically refers to the amount of change in one variable due to a unit change in another, commonly used in economics to describe rates of substitution or transformation.

Indifference Curve

A graph showing different combinations of two goods that give the consumer equal satisfaction and utility.

Marginal Rate

Marginal rate commonly refers to the change in one variable relative to a unit change in another, such as in taxation or interest.