Exam 15: Accounting for Colleges and Universities

The not-for-profit organization applying for tax-exempt status determines the appropriate subsection under IRC Sec.501 for which it wants to be considered and the Internal Revenue Service then approves or does not approve the application.

Performance measures that can be used to evaluate not-for-profit organizations include percentage of total expenses spent on the programs versus on supporting the programs and total dollars raised for fund-raising dollars spent.

A good measure of whether a not-for-profit organization is a "going concern" and can sustain its operations into the future is

Your client is a nongovernmental not-for-profit museum that operates a gift shop.Explain the unrelated business income tax to your client and suggest ways to avoid this tax.

Tax-exempt organizations must complete a Form 990 and send it to the Internal Revenue Service

The incorporating documents that have an external focus and describe the purpose of the organization without being too restrictive are called

Intermediate sanctions are often imposed by the Internal Revenue Service,in addition to revoking the tax-exempt status for organizations that confer excessive economic benefits on persons with substantial influence over the organization.

The purpose of the Internal Revenue Service's 2008 revision of the Form 990 is to simplify and shorten the form so that it takes less time for not-for-profit organizations to complete.

All of the following are reasons why the Internal Revenue Service (IRS)overhauled the Form 990 for tax years beginning in 2008 except

The income most likely to be considered unrelated business income of a human service organization that provides immunizations to children in the community is

Explain why Congress enacted the "intermediate sanctions" legislation in 1996.

Not-for-profit organizations are so diverse in nature that it is not feasible to find benchmarks with which to compare their financial and operating performance.

Many states have worked closely to have uniform policies relating to not-for-profit organizations in the areas of not-for-profit incorporation,charitable solicitation,investing funds,and protecting volunteers.

One of the limitations of financial ratio analysis for not-for-profit organizations is that donors may incorrectly assume that there are federal or state laws that govern the percentage of annual revenues that a charity must spend on its programs.

A good measure of whether a not-for-profit organization is spending too much on overhead,such as general and administrative expenses,is

Board members of a not-for-profit organization have a fiduciary responsibility to provide fiscal guidance and ongoing governance over the not-for-profit organization to ensure that its exempt mission is carried out as described in the incorporating documents and exempt application.

A good measure of whether a not-for-profit organization is efficient in its fund-raising efforts is

A state has the obligation to monitor and regulate a not-for-profit (NPO)organization because it granted the NPO tax-exempt status through the not-for-profit corporation laws.

All of the following are examples of acts or policies that are uniform across the United Stated for not-for-profit organizations except

Which of the following is a reason why an NPO might fail to qualify for tax-exempt status?