Exam 15: Accounting for Colleges and Universities

Which of the following is not a classification of revenues for a college or university as recommended by the National Association of College and University Business Officers (NACUBO)?

The following are key terms in Chapter 15 that relate to accounting for colleges and universities: A. Term endowments B. Annuity agreements C. Collections D. Pooled life income agreements E. Spending rate F. Total return For each of the following definitions, indicate the key term from the list above that best matches by placing the appropriate letter in the blank space next to the definition. _____1. Agreements to pay the donor the income earned by assets donated to an organization over the specified beneficiary's lifetime _____ 2. A comprehensive measure of the rate of investment return, which includes unrealized and realized gains and losses, as well as interest and dividend income _____ 3. A contribution that must be retained intact until the happening of a specific event or the passage of a stated period of time _____ 4. The proportion of total return that may prudently be used by an institution for current purposes _____ 5. Agreement to pay stipulated amounts periodically to the donor of assets by the recipient organization

Which of the following statements is regarding generally accepted accounting principles (GAAP)for colleges and universities?

Public colleges and universities that use business-type reporting must present segment information in the notes to the financial statements.

Nongovernmental (private)colleges and universities should follow FASB standards; governmental (public)colleges and universities should follow GASB standards.

The accrual basis of accounting is used to record revenues and expenses of both public business-type and private colleges and universities.

A college has collected returnable dormitory room deposits from students.How would these deposits be reported by the college?

Prepare in general journal form the entries required for each of the following selected transactions of Northern University,a state-funded public institution engaged only in business-type activities.Some of these transactions are related and some are not. 1.A generous alumnus donated $300,000 that can only be used for research on diabetes.The full $300,000 was received in FY 2017. 2.During FY 2017,expenses of $150,000 were made in cash for diabetes research (see item 1 above). 3.$2,000,000 in long-term bonds was issued to construct a new parking garage on campus. 4.During FY 2017,the parking garage (see item 3 above)was partially completed at a total cash expenditure of $1,800,000. 5.During 2017,interest was paid in the amount of $120,000 on the long-term bonds issued for the parking garage project (see item 3 above).

Which of the following items would not affect the amounts reported in the Revenues and Gains section of the statement of activities for a private college or university?

The federal government is considering a national ranking system in which colleges and universities would be ranked on affordability,among other factors.

Under GASB standards,public colleges and universities are considered general purpose governments.

How would a private college or university report its estimate for uncollectible tuition and fees on its statement of activities?

Both public and private universities report an infrastructure classification.

An example of a college outcome performance metric would be performance on nationally ranked exams such as the CPA exam.

"Tuition and fees should be recorded as revenues of colleges and universities even though they must be reported net of tuition refunds,scholarships,and fellowships." Do you agree or disagree with this statement? If you disagree,explain how refunds,scholarships,and fellowships should be recorded.

Which of the following is required as part of a complete set of financial statements for a private college or university?

GASB accounting and reporting standards applicable to public colleges and universities:

Cactus College,a small private college,received a research grant from NACUBO to study whether service efforts and accomplishments measures improve institutional performance.In accordance with FASB standards the grant would be reported as an increase in:

State educational appropriations received by a public university are classified as which of the following on the statement of revenues,expenses,and changes in net position?

An annuity agreement requires that a college pay the donor (or other designated individual)a fixed dollar amount at specified time intervals.