Which of the Following Statements Regarding a Private Foundation Is

question 140

Multiple Choice

Which of the following statements regarding a private foundation is not correct?

• A) Only certain exempt organizations are classified as private foundations.
• B) A donor who makes a contribution to a private foundation has identical tax consequences as a donor who makes a contribution to a public charity.
• C) A private foundation may be subject to certain excise taxes because it is a private foundation.
• D) A church is not a private foundation.
• E) All of the statements are correct.

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Definitions:

Normal Balances

The side (debit or credit) of an account that is increased, reflecting the conventional balance based on the account's classification within the accounting equation.

Dividends Declared

A statement by a company's board of directors announcing the issuance of dividends to shareholders; it signifies an obligation to make the dividend payments announced.

Liability Account

An accounting record representing an entity's obligations to pay debts or provide services to other entities in the future.

Expense Account

An account that records the costs incurred by a business during a period, such as rent, utilities, and salaries.