Asked by Akash Arora on Jul 04, 2024
Verified
Which of the following statements is true of not-for-profit corporations?
A) They provide services to their members.
B) They must distribute all of their surplus revenues to their shareholders.
C) They must distribute all of their excess revenues to charities.
D) They issue stocks only to their owners.
Surplus Revenues
Funds that exceed the expected or required amounts, often discussed in the context of governmental or organizational budgets.
Not-for-Profit Corporations
Organizations that operate for purposes other than making a profit, often focused on charitable, educational, or social missions.
- Distinguish between the regulatory frameworks that apply to for-profit, not-for-profit, and S corporations.
Verified Answer
ZK
Zybrea KnightJul 06, 2024
Final Answer :
A
Explanation :
Not-for-profit corporations do not issue stock and do not expect to make a profit.Instead,they provide services to their members under a plan that eliminates any profit motive.These corporations have members rather than shareholders,and none of the surplus revenue from their operations may be distributed to their members.
Learning Objectives
- Distinguish between the regulatory frameworks that apply to for-profit, not-for-profit, and S corporations.