Exam 11: College and University Accounting Private Institutions

Union Seminary uses the fund basis of accounting for internal record keeping.Presented below is the fully adjusted 12/31/2014 balance sheet for Union,prepared using funds and account groups.The following are fund descriptions: •Operating Fund - the fund used for transactions not falling within the definition of other funds.There are no restrictions on these resources. •Memorial Fund - Used to account for resources donated from outside parties for specific capital additions •Endowment Fund - Assets received from an outside donor for permanent investment,only the earnings may be expended. •Scholarship Fund - Cash set aside by the Seminary's governing board for use as scholarships and student aid. •Fixed Assets Account Group - A record of the Seminary's fixed assets and long-term debt. Required: Prepare a Statement of Financial Position following the guidelines provided in FASB Statements 116 and 117 for private not-for-profits and assuming Union does not classify plant assets as temporarily restricted.

Identify the primary financial reporting body for each of the following forms of college or university A.Private not-for-profit B.For Profit - Investor owned C.Public - government owned

When summer school classes at a university cover parts of two fiscal years,the revenues and expenses are

Plant acquired by a private college with either unrestricted or restricted resources may be (1)recorded initially as unrestricted OR (2)recorded initially as temporarily restricted and then classified in accordance with the depreciation schedule.

Identify three types of restrictions placed on temporarily restricted net assets of a private sector college or university and outline the accounting requirements for each type.

Private,Not-for-profit Colleges and Universities and Investor-owned Schools follow FASB standards and adhere to the accrual basis of accounting.

NACUBO guidelines require both revenues and expenses for split summer sessions to be apportioned to the two fiscal years.

FASB standards require private colleges and universities to present a Statement of Cash Flows.

Financial statements prepared for private colleges and universities present net assets as: unrestricted,restricted,or invested in capital assets net of related debt.

With respect to colleges and universities,estimates of uncollectible accounts are accounted for as reductions in revenue rather than bad debt expense.

Funds that are restricted for a certain number of years and then released are considered to be quasi-endowments and are classified as temporarily restricted funds by private colleges and universities.

The three classes of net assets required to be presented by a private college or university are:

Public Colleges and Universities are subject to standards issued by the GASB and most commonly report as special-purpose governments engaged in business-type activities.

According to NACUBO guidelines,what is the correct treatment for recognizing summer school revenues and expenses when a college's fiscal year ends on June 30?

Private colleges and universities are required to present a Statement of Cash Flows using the direct method.

A charitable remainder trust and a charitable gift annuity differ in that no formal trust agreement exists for a charitable gift annuity.

On January 1,2014,Antioch College,a private not-for-profit college,received $8,000,000 in cash to purchase an electron microscope.The microscope was delivered on July 1,2014 and payment was made.The microscope is expected to last 10 years and has no salvage value at the end of that time.The fiscal year end is December 31. a.Record the journal entries required on January 1,July 1,and December 31,2014 to record the receipt of the cash,the purchase of equipment,and one half year's depreciation,assuming the plant assets are recorded as unrestricted assets at the time of purchase. b.Record the journal entries required on January 1,July 1,and December 31,2014 to record the receipt of the cash,the purchase of equipment,and one half year's depreciation,assuming the plant assets are recorded as temporarily restricted assets at the time of purchase.

Which of the following would not be correct with respect to accounting for colleges and universities under the jurisdiction of the FASB?

Private colleges and universities and investor-owned proprietary schools report the same categories of net assets.

Which of the following is a required statement for a private college?