The Organization Shelter the Needy Is Completing Its Form 990

question 46

Multiple Choice

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?

• 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.

---

Definitions:

FIFO Method

A method in accounting for managing inventories and financial matters where the first items placed in inventory are the first ones to be used or sold.

Equivalent Units

A concept used in cost accounting to express the amount of work done by an incomplete production process on units of output, converted into an equivalent number of fully completed units.

FIFO Method

"First In, First Out," an inventory valuation method where goods first added to inventory are the first ones to be sold.

Weighted-Average Method

A technique used in various contexts, such as inventory valuation and cost accounting, that calculates an average taking into account the proportionate importance of each component.