Which of the Following Activities Is Not Subject to the Feeder

question 115

Multiple Choice

Which of the following activities is not subject to the feeder organization rules?

• A) One hundred percent of the net income of the for-profit entity is contributed to the exempt organization.
• B) A trade or business where substantially all the work is performed by volunteers.
• C) A trade or business of selling merchandise where substantially all of the merchandise has been received as contributions or gifts.
• D) Only b. and c.
• E) a., b., and c.

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Definitions:

Assets

Resources owned or controlled by a business, individual, or entity that are expected to provide future economic benefits.

Accounting Equation

A fundamental financial principle representing the balance between a company's assets, liabilities, and equity.

Office Furniture

Tangible items such as desks, chairs, and filing cabinets that are used in an office environment.

Cash

A company's currency or currency equivalents that can be accessed immediately or at short notice.