Test Your Knowledge Press Enter to Start. E.All of the above Upon recognition, exempt organizations are not required to pay federal or state income taxes.

Test Your Knowledge

Press Enter to Start

E. All of the above

Upon recognition, exempt organizations are not required to pay federal or state income taxes as well as federal unemployment taxes. While exemptions from other taxes may exist in some states, the requirements are very narrowly defined. Press enter for the next question.

C. Sales tax

B. Property taxes

D. Unrelated business income taxes

A. Federal unemployment taxes

FALSEAn organization who operates as a separate entity is required to obtain its own tax identification number and tax exemption status. Group exemptions exist but the subordinate organizations must be under the general supervision and control of the parent organization. Press enter for the next question.

E. Within one year of the end of the fiscal year

Unless an extension of time has been requested, an exemption organization must file its annual information returns 5 ½ months after the end of its fiscal year. If an extension is being requested, it must be filed prior to this deadline. Press enter for the next question.

C. 5 ½ months following the end of the fiscal year

B. 3 months following the end of the fiscal year

D. Upon completion of the annual audit

A. March 15th of each year

FalseA Board member of a tax exempt organization cannot abdicate their responsibility. Whether they participate in the vote or are even present at a Board meeting, a Board member is held responsible for the decisions of the Board. Press enter for the next question.

TrueAny volunteer leader who does not conduct themselves in a fiduciary manner can be held personally liable for their decisions, actions, omissions, and/or errors. Press enter for the next question.

E. All of the above

To the extent advertising income exceeds advertising expenses it is subject to unrelated business income tax and must be reported on form 990-T. A $1,000 threshold must be met before an organization is required to file a 990-T. Press enter for the next question.

C. Royalties

B. Mailing List Sales

D. Sponsorships

A. Advertising Income

E. All of the above

Exempt organizations are required to provide copies of their application for tax exemption and/or copies of their annual information returns to any member of the public who request those documents. A reasonable fee can be charged for providing these documents. There are not any legal requirements to provide bylaws to any individual who is not a member of the organization. Press enter for the next question.

C. Annual tax filingsB. Compensation paid to officers and key employees

D. An organization’s bylaws

A. Application for tax exemption

FalseA budget is simply a tool for leaders and staff to monitor the financial performance of an organization. Budgets are typically based on some level of assumption which may prove to be false. Consequently, budgets must be reviewed and adjusted periodically to remain an effective tool. Press enter for the next question.

TrueBecause of the financial impact and commitment of an organization's annual conference, conference cancellation insurance should always be pursued. Recent history has demonstrated a natural disaster can occur when and where least expected. Press enter for the next question.

E. All of the above

The listed financial statement represent the minimum that should be presented at each Board meeting. While formal reports are not necessary, the information conveyed in these reports should be communicated and discussed among the leadership to effectively monitor the financial health of an organization. Press enter for the next question.

C. Actual to budget comparisonsB. Income Statement

D. Current year verses last year comparisons

A. Balance Sheet

FalseOral contracts are just as valid as signed agreements as long as a “meeting of the minds” and other necessary elements of an agreement

can proven; a signed contract, more easily proves the intent of the parties to enter the agreement. Without a signed contract proving this intent could be very difficult. Press enter for the next question.

E. All of the above carry the weight of law

Each of items listed carry the weight of law and are in the order of legal priority. Consequently, it is imperative that policies, procedures and past practices be reviewed, modified, deleted, and followed. Press enter for the next question.

C. Policies and ProceduresB. Bylaws

D. Past Practices

A. Articles of Incorporation

E. Profitability of non dues revenues

While how much the market will bear is important, the other issues noted are far more critical when establishing. Without this information there is no way to determine if pricing structure is financially viable. Press enter for the next question.

C. How much the student can afford

B. The annual conversion rate of student to professional

D. Ratio of student to professional members

A. Cost of providing services

E. All of the above

Reducing expenses represents the best solution as it is the only choice completely within the control of the organization. Transferring from reserves is effectively deficit budgeting and, while at times it may be appropriate it should be avoided. Press enter for the next question.

C. Increase revenues by raising rates

B. Use a transfer from reserves to offset the difference

D. Increase your expectations from investment revenues

A. Reduce expenses

The balance sheet does not balance

Cash is not being properly invested

Asset allocation may indicate that value of the assets are overstated.

An unrestricted fund deficit exists.

Press enter for the next question.

ASSETS

Cash–non interest bearing $ 268,421Investments 21,646Furniture & Equipment 442,621

Total Assets $ 734,068

LIABILITIES AND FUND BALANCE

Accounts Payable 50,132Deferred Revenue 395,209

Total Liabilities 445,341

Unrestricted Fund Balances (61,373)Designated Fund Balances 256,298 Retained Earnings ( 6,198)

Total Fund Balance (Deficit) 188,727

Total Liabilities & Fund Balance (Deficit) $ 634,068

FalseFailing to recognize and properly file the appropriate annual reports is one of the most significant challenges facing exempt organizations. Because of the potential risk associated with these two distinct groups, a thorough understanding of the difference is strongly recommended. Press enter for the next question.

FalseExempt organizations are free to make as much money as they can as long as they stay within their exempt purpose. However, unlike for-profit companies, the assets of an exempt organization can not be used to inure an individual. Consequently, excess revenues are expected to be rolled into the organization’s exempt purpose. Press enter for the next question.

17-16 Correct

Congratulations you’re qualified to be ACA’s treasurer

15-13 correct

Good job, you’re fairly well prepared to serve your organization

12-10 correct

Respectable but a refresher wouldn’t hurt you

09-01 correct

See you at the session later this month