Problem 3: Characteristics of various organizations Listed below are some identifying characteristics of organizations. Type an "X" in the appropriate column(s) to indicate which characteristics apply to each type of organization. Some characteristics apply to more than one type of organization. Characteristic Operates according to a legal budget Reports entity-wide financial statements Uses accrual basis of accounting Has equity shareholders Uses modified accrual basis of accounting Financial reporting includes reporting funds Is tax exempt but owes federal income taxes on unrelated business income Files federal income tax returns Reports deferred inflows and deferred outflows of resources Reports economic resources Financial reporting follows standards of the Financial Accounting Standards Board Revenues come primarily from voluntary exchange transactions Type of organization For profit business Nonprofit State and local government