PRC-3 · Chapter 1 · Question 16 of 61
A local charity is formed to provide clean drinking water to remote villages. Since it does not distribute profits to owners, how should this entity be classified?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Not-for-profit organization
Explanation
Not-for-profit organizations exist to fulfill a social, educational, or charitable purpose rather than to generate and distribute profits to owners.
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