Question 1

Which of the following is true regarding the Statement of Revenues,Expenses,and Changes in Net Position for a public college,operating as a special-purpose entity engaged only in business-type activities?

Accepted Answer

A)   Student scholarship allowances should be reported as operating expenses as long as no services are provided.
B)   Expenses are recorded when incurred.
C)   Depreciation expense is not recorded.
D)   None of the above. B

Question 2

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

Accepted Answer

A) True 
 B)False  False

Question 3

What are the required parts of the annual financial report for special-purpose local governments engaged only in business-type activities?

Accepted Answer

MD&A
Enterprise Fund Financial Statements including:
Statement of Net Position or Balance Sheet
Statement of Revenues,Expenses,and Changes in Net Position
Statement of Cash Flows
Notes to the financial statements
RSI other than MD&A,if applicable

Question 4

The following data applies to the next two questions.
•Northern University has a fiscal year end of June 30.
•In June 2015, tuition and fees of $1,200,000 was assessed for the summer term that runs from June 1, 2015 through August 31, 2015. $1,200,000 was collected on June 1, 2015.
-What is the journal entry on June 1 for Northern?

Accepted Answer

A)   Cash and Cash Equivalents 1,200,000 Operating Revenues-Student Tuition and Fees 400,000Deferred Revenues-Student Tuition and Fees 800,000
B)   Cash and Cash Equivalents 400,000 Cash and Cash Equivalents, Reserved 800,000Operating Revenues-Student Tuition and Fees 400,000Deferred Revenues-Student Tuition and Fees 800,000
C)   Cash and Cash Equivalents 1,200,000 Operating Revenues-Student Tuition and Fees 1,200,000
D)   Cash and Cash Equivalents 1,200,000 Deferred revenue 1,200,000

Question 5

According to GASB Statement No.34,"General-purpose governments are thought to be those that offer more than one type of basic governmental service".

Accepted Answer

A) True 
 B)False

Question 6

Public colleges who waive fees for graduate assistants must report tuition at the gross amount and expense the fees waived.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is true regarding the financial statements for special-purpose entities?

Accepted Answer

A)   Special-purpose entities that are engaged only in one governmental activity may combine government-wide and governmental fund statements.
B)   Special-purpose entities that are engaged in fiduciary activities only prepare the statements required for fiduciary funds (Statement of Fiduciary Net Position, Statement of Changes in Fiduciary Net Position) .
C)   Both of the above.
D)   Neither of the above.

Question 8

According to the National Association of College and Business Officers,scholarship discounts and allowances paid by institutional funds,assuming that no services are provided by the recipients:

Accepted Answer

A)   Are included in tuition revenue and recorded as an expense.
B)   Are reported as a reduction of revenue by directly reducing the revenue account or increasing a contra- revenue account.
C)   Are not included in tuition revenue but are included as an "other source".
D)   Are reported as an adjustment to tuition revenue in the government-wide statements.

Question 9

According to GASB Statement 33,with respect to public colleges and universities,pledges receivable are recognized as assets and revenues when eligibility requirements are met.

Accepted Answer

A) True 
 B)False

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

The following information applies to the next three questions:
Tuition and fees for the Northern University was assessed at $22,000,000. Scholarship allowances, for which no services are required, were $1,600,000 and graduate assistantships, for which services are required, were $1,000,000.
-What is the journal entry to record tuition revenue?

Accepted Answer

A)   Accounts receivable 20,400,000 Operating Revenue-Student Tuition & Fees 20,400,000
B)   Accounts Receivable 22,000,000 Operating Revenue-Student Tuition & Fees 22,000,000
C)   Accounts Receivable 19,400,000 Operating Revenue-Student Tuition & Fees 19,400,000
D)   Accounts Receivable 21,000,000 Operating Revenue-Student Tuition & Fees 21,000,000

Question 12

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

Accepted Answer

A)   A public school system.
B)   An art museum.
C)   A public hospital.
D)   A county board of supervisors.

Question 13

Which of the following is not true regarding financial reporting of special-purpose entities?

Accepted Answer

A)   Special-purpose entities might be included as component units in a primary government's financial statements.
B)   Special-purpose entities that engage in a single governmental activity may prepare statements that combine government-wide and governmental fund statements.
C)   Special-purpose entities that are engaged only in fiduciary activities must prepare a Statement of Activities and a Statement of Fiduciary Net Position.
D)   None of the above - all are true.

Question 14

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

Accepted Answer

The answer of What is the difference between a component...

Question 15

Public colleges must report tuition income net of athletic scholarships.

Accepted Answer

A) True 
 B)False

Question 16

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.

Accepted Answer

A) True 
 B)False

Question 17

Special-purpose governments that are engaged in both governmental and business-type activities are required to use the full reporting model including MD&A,government-wide and fund-basis statements,notes to the financial statements and RSI.

Accepted Answer

A) True 
 B)False

Question 18

Revenue sources for public colleges include tuition and fees and donations. All other income is reported as unrelated business income.

Accepted Answer

A) True 
 B)False

Question 19

GASB Statement 35 extends the provisions of GASB Statement 34 to both public and private colleges and universities.

Accepted Answer

A) True 
 B)False

Question 20

A County could be either a general-purpose or a special purpose government.

Accepted Answer

A) True 
 B)False

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

Which of the following is true regarding the Statement of Revenues,Expenses,and Changes in Net Position for a public college,operating as a special-purpose entity engaged only in business-type activities?

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

What are the required parts of the annual financial report for special-purpose local governments engaged only in business-type activities?

According to GASB Statement No.34,"General-purpose governments are thought to be those that offer more than one type of basic governmental service".

Public colleges who waive fees for graduate assistants must report tuition at the gross amount and expense the fees waived.

Which of the following is true regarding the financial statements for special-purpose entities?

According to the National Association of College and Business Officers,scholarship discounts and allowances paid by institutional funds,assuming that no services are provided by the recipients:

According to GASB Statement 33,with respect to public colleges and universities,pledges receivable are recognized as assets and revenues when eligibility requirements are met.

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

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

Which of the following is not true regarding financial reporting of special-purpose entities?

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

Public colleges must report tuition income net of athletic scholarships.

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.

Special-purpose governments that are engaged in both governmental and business-type activities are required to use the full reporting model including MD&A,government-wide and fund-basis statements,notes to the financial statements and RSI.

Revenue sources for public colleges include tuition and fees and donations. All other income is reported as unrelated business income.

GASB Statement 35 extends the provisions of GASB Statement 34 to both public and private colleges and universities.

A County could be either a general-purpose or a special purpose government.