You Are Trying to Decide If an Entity You Are

question 26

Multiple Choice

You are trying to decide if an entity you are reviewing is a government or a not-for-profit. Which of the following would indicate it is a government rather than a not-for-profit entity?

• A) Absence of profit motive.
• B) A primary source of revenues is taxes.
• C) Resource providers do not expect benefits proportional to the resources provided.
• D) Absence of a defined ownership interest that can be sold, transferred, or redeemed.

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Definitions:

Income Stocks

Stocks that regularly pay high dividends, typically associated with well-established companies with stable earnings.

Cash Dividends

Profits distributed to shareholders out of a company's earnings in the form of cash.

Large Capital Stocks

Shares issued by a company that represent significant equity ownership and investment in the company.

Cash Dividend

A payment made by a corporation out of its earnings to shareholders, usually in the form of cash.