A State Has the Obligation to Monitor and Regulate a Not-For-Profit

question 54

True/False

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.

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Definitions:

Reversing Entry

An accounting technique used to simplify record-keeping, where an entry made in one accounting period is reversed in the next period to allow for straightforward transaction recording.

Adjusting Journal Entry

A journal entry made at the end of an accounting period to record any unrecorded income or expenses for that period, ensuring that financial statements adhere to the accrual basis of accounting.

Revenue Account

An account that tracks the income earned from normal business operations.

Expense Account

An income statement account that represents the cost of goods sold, operating expenses, and non-operating expenses.