Which of the Following Is an Area of Concern by the IRS

question 58

Multiple Choice

Which of the following is an area of concern by the IRS with respect to tax-exempt organizations?

• A) Cost allocations.
• B) Excess executive compensation.
• C) Organizations operating out of their tax-exempt purpose.
• D) All the above.

---

Definitions:

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or within the operating cycle of the business, whichever is longer.

Current Liabilities

Financial obligations a company owes and is required to settle within a year.

Acid-Test Ratio

A financial metric that measures a company's ability to meet its short-term obligations with its most liquid assets.

Current Ratio

A liquidity ratio that measures a company's ability to pay off its short-term liabilities with its short-term assets.