Exam 11: College and University Accounting Private Institutions

With respect to private colleges and universities,why are quasi-endowments not classified as permanently restricted net assets while true endowments are?

College and universities treat uncollectible student accounts as bad debt expense.

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

Private colleges and universities recognize contribution revenue in the year in which the payment is received.

What are the reporting options for the Statement of Financial Position of institutions of higher education as outlined by the NACUBO Financial Accounting and Reporting Manual for Higher Education?

A private college received a $2,000,000 gift from a donor. The college's governing board voted to use the $2,000,000 to establish an endowment,with the intent to keep the principal intact forever. The income from the endowment was to be used to fund research in the biology department. How should the college classify the $2,000,000 gift?

When a private college or university has a foundation,and that foundation receives contributions specifically directed for the benefit of the college or university,

Which of the following is true regarding accounting and financial reporting for private colleges and universities?

Academic or athletic scholarships that do not require service to the college or university are considered scholarship allowances and treated as reductions in revenue.

Private colleges and universities are subject to the standards issued by the FASB.

Private colleges and universities are required to report net assets within the categories of unrestricted,restricted and net investment in capital assets.

Which of the following is true of a Statement of Activities prepared for a private college or university?

When a private college is the recipient of a perpetual trust held by a third party,the initial contribution revenue is recorded in the permanently restricted net asset class,and income received from the trust is recorded as either unrestricted or temporarily restricted investment income,depending on the trust agreement.

If a donor were to contribute money with instructions that the funds be invested for a period of time and then released to be used for any purpose,this would be called a(n):

Which of the following is true regarding the investments of private colleges in securities with determinable fair values?

In 2015,a major drug company agreed to give a not-for-profit private college $2,100,000 to perform testing of a new drug. An advance payment of $700,000 was received in 2015. The college was to receive $7,000 per individual test. In 2015,the college completed 100 tests. How much revenue should the college report for 2015?

Public colleges and universities are (primarily)subject to financial reporting standards issued by:

Private colleges are required to report net assets in the following categories:

Under FASB standards,quasi-endowments are classified as Unrestricted Net Assets.

Under FASB standards,true endowments are classified as Permanently Restricted Net Assets.