Exam 9: Accounting for Special-Purpose Entities, Including Public Colleges and Universities

What is the journal entry to record tuition revenue? A) Accounts receivable 25,000,000 Operating Revenue-Student Tuition \& Fees 25,000,000 B) Accounts Receivable 23,800,000 Operating Revenue-Student Tuition \& Fees 23,800,000 C) Accounts Receivable 24,100,000 Operating Revenue-Student Tuition \& Fees 24,100,000 D) Accounts Receivable 22,900,000 Operating Revenue-Student Tuition \& Fees 22,900,000

Special-purpose governmental entities that are engaged in a single business activity are not required to prepare government-wide financial statements, but may issue only enterprise fund statements.

Which of the following statements is true of a Special-purpose government?

Revenue for reimbursement grants may be recognized before expenditures take place as long as the grant has been received.

Higher education institutions that report as special purpose entities engaged in business-type activities only should report the same net asset classifications (invested in capital assets, net of related debt, restricted, unrestricted) as are reported in the government-wide statement of net assets.

Special purpose local governments engaged only in fiduciary-type activities are required to prepare all of the following financial reports except:

Northern University received $2,000,000 from donors for endowments. The principal may not be expended. One half of the income is to be used for research and the other half is to be used for scholarships. What is the journal entry to record this event? A. Restricted Cash and Cash Equivalents 2,000,000 Research Endowment 1,000,000 Scholarship Endowment 1,000,000 B. Restricted Cash and Cash Equivalents 2,000,000 Permanent Endowment Fund 2,000,000 C. Restricted Cash and Cash Equivalents 2,000,000 Additions to Permanent Endowments Income Restricted for Research 1,000,000 Additions to Permanent Endowments Income Restricted for Scholarships 1,000,000 D. Cash - Restricted for Research 1,000,000 Cash - Restricted for Scholarships 1,000,000 Research Endowment 1,000,000 Scholarship Endowment 1,000,000

Which of the following would not be considered a special-purpose government for financial reporting purposes?

Public colleges and universities account for revenue bonds using the expenditure method.

Which of the following is true regarding the Statement of Cash Flows for a public college?

Public colleges and universities may choose to report as:

Public colleges must report tuition income net of athletic scholarships.

According to GASB Statement 33, with respect to public colleges and universities, pledges receivable are recognized as assets and revenues when the pledge is made.

Public higher education institutions that report as special-purpose entities engaged in business-type activities only are still required to prepare a Management's Discussion and Analysis.

Special-purpose governments that are engaged in more than one governmental activity are permitted to combine the fund and government-wide financial statements.

Special-purpose governments that are engaged in both governmental and business-type activities are permitted to combine the fund and government-wide financial statements.

Public colleges and universities that choose to report as special-purpose entities engaged only in business-type activities would have which of the following financial statements?

What is the difference between a component unit and a special purpose local government?

General state appropriations are treated as nonoperating revenue of public colleges and universities.

Public institutions of higher education are required to produce a Statement of Cash flows in addition to a Statement of Net Assets and a Statement of Revenues, Expenses and Changes in Net Assets.