Which of the Following Is Not Prohibited of Organizations Receiving

question 56

Multiple Choice

Which of the following is not prohibited of organizations receiving tax-exempt status under IRS Section 501(c) (3) ?

• A) Earning a profit (increase in net assets).
• B) Distributing earnings to the benefit of members or officers.
• C) Endorsing political candidates or attempting to influence legislation.
• D) None of the above. All of these are prohibited of Tax-exempt organizations.

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Definitions:

Larger Organizations

Entities that are significant in size due to their vast operational scale, robust infrastructure, and extensive employee base, affecting their management and operational strategies.

Budget Preparation

The process of creating a financial plan to forecast revenues and expenditures for a future period, facilitating financial management and planning.

Financing Activities

Transactions and business events that affect long-term liabilities and equity of a company, included in the cash flow statement section.

Capital Expenditures Budget

A budget allocation for the planned spending on long-term assets, such as buildings, machinery, and equipment, intending to enhance the capacity or efficiency of the business.