Which of the Following Statements About a Not-For-Profit Firm’s Ownership

question 9

Multiple Choice

Which of the following statements about a not-for-profit firm’s ownership is most correct?

• A) Not-for-profit firms are governed by a board of trustees whose members are elected by the community at large.
• B) The residual earnings (profits) of not-for-profit firms can be distributed to the firm’s top managers.
• C) Not-for-profit firms are exempt from federal taxes, but they must pay state and local taxes, including property taxes.
• D) Upon liquidation of a not-for-profit firm, the proceeds from the sale of its assets are distributed, on a pro rata basis, to the firm’s employees.
• E) None of the profits are used for private inurement.

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Definitions:

Alcohol

A psychoactive substance commonly found in drinks like beer, wine, and spirits, known for its intoxicating effects.

Other-race Effect

The tendency to recognize faces of one's own race more easily than those of other races.

Intent to Hurt

The deliberate desire or determination to cause physical or emotional harm to others.

Mild-mannered

Describing someone who is gentle and not easily angered or agitated.