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Quiz
4 - Finance and Taxation of Cooperatives
Name ___________________________________________ Date _______________
1. List two
ways cooperative member-owners help to capitalize their business.
a)
____________________________________________________________________________
b)
____________________________________________________________________________
2. Imagine
yourself as a manager of a cooperative. A cooperative member approaches
you and raises the following question: "What is the main diference
between retained patronage and per-unit retains?" How would you respond?
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
3. How would you
explain to that member the difference between equity capital and debt
capital?
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
4. List three
sources of long-term credit for cooperatives
a)
____________________________________________________________________________
b)
____________________________________________________________________________
c)
____________________________________________________________________________
5. The statement
"cooperatives do not pay taxes" is not true because:
__________________________________________________________________
__________________________________________________________________
6. Explain
the single tax principle, and how it works for cooperatives.
__________________________________________________________________
__________________________________________________________________
7. Classify the
following area as either a cash source (S) or cash use (U) in a
cooperative business.
_____ Sale of fixed assets
_____ Members purchase common stock
_____ Giving customers credit
_____ Buying inventory
_____ Sale of inventory
_____ Purchasing members production
_____ Collecting accounts receivable
_____ Nonmembers purchase preferred stock
_____ Suppliers give 30 day credit
_____ Paying accounts receivables
8. Thought
question for extra credit. Why can the business expense
depreciation be considered as a source of cash in the
cooperative’s cashflow?
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