Which of the Following Statements Regarding the Unrelated Business Income

question 6

Multiple Choice

Which of the following statements regarding the unrelated business income tax is correct?

• A)Private foundations are not subject to the unrelated business income tax.
• B)Bingo games are not subject to the unrelated business income tax if they are conducted by an exempt organization.
• C)The exchange or rental of membership lists with other exempt and nonexempt organizations is not an unrelated trade or business.
• D)Only a.and c.are correct.
• E)None of the statements is correct.

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Definitions:

Net Sales

The amount of sales generated by a company after deducting returns, allowances for damaged or missing goods, and any discounts allowed.

Credit Losses

Financial losses that a lender anticipates or experiences due to borrowers failing to make required payments.

Allowance for Doubtful Accounts

A contra-asset account used to estimate the amount of receivables that may not be collectible.