Which of the Following Are Consequences of Tax-Exempt Status

question 35

Multiple Choice

Which of the following are consequences of tax-exempt status?

• A)Not necessary to file a Federal income tax return.
• B)Generally exempt from Federal income tax.
• C)Contributions to the exempt organization are deductible by the donor.
• D)Only b.and c.
• E)a., b., and c.

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Definitions:

Insurance Expense

The cost associated with purchasing insurance policies for the business, considered an operating expense.

Postage Expense

The cost incurred by a business to send mail or packages, recorded as an expense in the business's financial statements.

Petty Cash Account

A small amount of cash kept on hand within a business for minor, routine expenses.

Petty Cash Overage

A situation where the amount of petty cash on hand is more than the recorded amount, indicating discrepancies in transactions or recording errors.