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

A special-purpose government engaged in business-type activities financed in whole or part by fees charged to external parties are usually reported in enterprise funds.

Public colleges and universities are required to report as special purpose entities engaged in both governmental- and business-type activities because they receive tax dollars and charge user fees.

Special-purpose governmental entities that are engaged in a single governmental-type activity only are required to prepare only the statements required for governmental fund basis financial statements.

GASB Statement 39 applies to all of the following except:

Which of the following is true regarding the Statement of Revenues, Expenses and Changes in Net Assets for a public (government-owned) college?

Fees waived by the an educational institution in return for services to be provided are accounted for:

Governmental health care entities, public school systems and museums are accounted for as special-purpose governments.

According to the National Association of College and Business Officers, scholarship discounts and allowances paid by institutional funds:

Assume a government is determined to be a special-purpose government engaged in business-type activities only. Which of the following financial statements would be required?

Tuition waived for work-study and graduate assistants is deducted from student fee income when preparing a Statement of Revenues, Expenses and Changes in Net Assets.

The implementation guide for GASB Statement 34 provides a distinction by indicating that "general purpose governments are thought to be those that offer more than one type of basic governmental service.

Which of the following is true regarding accounting and financial reporting for special-purpose entities?

Northern University received state appropriations as follows: Unrestricted general purposes 1,000,000 Capital outlay, set aside for specific projects 750,000 What is the journal entry to record this event? A. Cash and Cash Equivalents 1,750,000 Nonoperating Revenues - State Appropriations 1,000,000 Capital Appropriations 750,000 B. Cash and Cash Equivalents 1,750,000 Nonoperating Revenues - State Appropriations 1,000,000 Nonoperating Revenues-Capital Appropriations 750,000 C. Cash and Cash Equivalents 1,000,000 Restricted Cash and Cash Equivalents 750,000 Nonoperating Revenues - State Appropriations 1,000,000 Capital Appropriations 750,000 D. Cash and Cash Equivalents 1,000,000 Restricted Cash and Cash Equivalents 750,000 Operating Revenues - State Appropriations 1,000,000 Operating Revenues - Capital Appropriations 750,000

When is this revenue reportable on the financial statements for Northern?

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

Special-purpose governments that are engaged in more than one governmental activity are required to use the full reporting model including MD&A, government-wide and fund-basis statements, notes to the financial statements and RSI.

Which of the following statements is true regarding public colleges and universities choosing to report as special-purpose entities engaged in business-type activities only?

Public colleges must depreciate infrastructure and may not use the modified approach.

A public college had tuition and fees for the year ended June 30, 2009 in the amount of $45,000,000. Scholarships, for which no services were required, amounted to $2,500,000. Graduate assistantships, for which services were required, amounted to $2,300,000. The amount to be reported by the college for net tuition and fee revenue would be:

Northern State University had the following account balances for the year ended and as of June 30, 2009. Debits are not distinguished from credits, so assume all accounts have a "normal" balance. Additions to permanent endowments 1,100,000 Auxiliary enterprise revenue 5,200,000 Capital grants and gifts 1,260,000 Depreciation expense 2,310,000 Employee Benefits 2,410,000 Federal grants and contracts revenue 1,350,000 Gifts 760,000 Interest on capital-related debt 1,200,000 Investment income 380,000 Net assets, beginning of year 22,400,000 Nonexempt wages 3,420,000 Other operating expenses 3,600,000 Salaries-exempt staff 4,100,000 Salaries-faculty 6,370,000 Scholarship tuition and fee contra revenue 900,000 Scholarships and fellowships expense 901,000 State and local grants and contracts revenue 710,000 State appropriation for operations 6,400,000 State appropriations for capital additions 1,340,000 Student tuition and fee revenue 8,500,000 Required: Prepare, in good form, a Statement of Revenues, Expenses and Changes in Net Assets for Northern State University for the year ended June 30, 2009.