Your Client Is a Nongovernmental Not-For-Profit Museum That Operates a Gift

question 17

Essay

Your client is a nongovernmental not-for-profit museum that operates a gift shop. Explain the unrelated business income tax to your client and suggest ways to avoid this tax.

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Definitions:

Asset Account

An account that records the value of assets owned by a person or organization.

Revenue Account

A ledger account that tracks the income earned by a business from its operating activities, before any expenses are deducted.

Sales Discount

A reduction in the price of goods or services offered to customers, to encourage early payment or reward them for their purchase.