To Maintain Exempt Status, an Organization Must Do Which of the Following

question 82

Multiple Choice

To maintain exempt status, an organization must do which of the following:

• A)Satisfy only an organizational test.
• B)Satisfy only an operational test.
• C)Satisfy both an organizational test and an operational test.
• D)Satisfy a financial test.
• E)Once exempt status is granted, it will continue regardless of whether the organizational test and the operational test are satisfied.

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Definitions:

Investing Activities

Financial activities related to the acquisition and disposal of long-term assets and other investments not included in cash equivalents.

Net Cash Provided

The total amount of cash generated by a company's operations, investments, and financing activities within a specific time frame.

Cash Dividends

Payments made by a company out of its earnings to its shareholders, often distributed on a regular basis.

Indirect Method

A technique used in cash flow statement preparation that adjusts net income for the effects of transactions not involving cash.