To Satisfy the Broadly Supported Provision to Avoid Classification as a Private

question 78

True/False

To satisfy the broadly supported provision to avoid classification as a private foundation, the exempt organization must satisfy both an external support test and an internal support test. Under the internal support test, more than one- third of the exempt organization's support for the taxable year must come from gross investment income and unrelated business taxable income.

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Definitions:

Finished Goods Account

An account used to track the value of products that are completed and ready for sale.

Factory Overhead Ledger

An accounting ledger that details the indirect costs associated with manufacturing, which may include utilities, depreciation, and salaries of non-direct labor.

Unit Costs

The cost associated with a single unit of product or service, including all costs incurred to produce, deliver, and sell the product.

Job Order Cost Systems

An accounting method that assigns costs to specific batches or job orders, tracking the direct materials, direct labor, and manufacturing overhead per job.