Question

1. Which of the following is a distinguishing characteristic of a nonprofit organization? a. Its revenues do not exceed its expenses b. There is an absence of ownership interests that can be sold, transferred, or redeemed c. It does not depreciate its capital assets d. It does not charge fees for any of its services Answer: B Rationale: Nonprofit organizations, unlike business enterprises, lack ownership interests. Therefore, they do not engage in ownership-type transactions, such as issuing stock and paying dividends. Topic: Operating Environment LO: 1 2. Which of the following activities is performed by state and local governments but not nonprofit organizations? a. Issuing federal tax-exempt debt b. Receiving grants c. Preparing budgets d. Providing services to constituents

Answer 1

Answer:

1. Statement b.

2. Statement a.

Explanation:

The answer to part 1 has been provided.

For part 2 we have,

The government bodies whether state government or local government bodies have the power to issue tax free bonds, but the non profit organizations, cannot do so, as for NPO's there are certain legal benefits provided which clearly provides exemptions to the income of non profit organizations, but in no manner authorizes the non profit organization to have its own regulations affecting economy.

As issue of tax free bonds is not authorized it cannot do so.