Question

Multiple Choice. Choose the best answer.

Colleges and universities look to which standard-setting body for GAAP?

The GASB.

The FASB.

The NACUBO.

It depends on whether the entity is public, private, or for-profit.

Which of the following statements is prepared by both a private and public college or university?

Statement of net assets.

Statement of cash flows.

Statement of activities.

Statement of net position.

Which of the following is a true statement about tuition revenue in a college or university?

Scholarships should always be reported as expenses.

Tuition receivables estimated to be uncollectible should be reported as an operating expense.

Refunds should be reported as deductions from gross revenue.

All of these statements are true.

A university expended $2,475,000 on a new parking facility. The transaction was reported as an investing activity on its direct method statement of cash flows. What type of university prepared the statement of cash flows?

A public university.

A for-profit university.

A private university.

Either b or c.

Last year Zelnick College showed a positive revenue over expenses number for the first time in several years. The college is funded with contributions, grants, two government appropriations (state and local), and tuition and fees. Zelnick College is most likely what type of college?

A private for-profit college.

A private not-for-profit college.

A public university engaged primarily in governmental activities

A public university engaged primarily in business-type activities.

Gresham College is a local private college. When reviewing the college's financial reports, you would expect to see which of the following categories on its statement of assets and liabilities?

Unrestricted net assets, temporarily restricted net assets, and permanently restricted net assets.

Unrestricted net position, temporarily restricted net position, and permanently restricted net position.

Unrestricted net position, restricted net position, and net investment in capital assets.

Unrestricted net assets, restricted net assets, and net investment in capital assets.

How would a university account for funds received from an external donor that are to be retained and invested, with the related earnings restricted to the purchase of library books?

Temporarily restricted net assets in a private university.

Permanently restricted net position in a private university.

Unrestricted net assets/position in either a private or public university.

Nonspendable, endowment in a public university.

Which of the following statements is incorrect concerning the financial reports of colleges and universities?

The NACUBO account titles are frequently used for reporting revenues and expenses by both private and public entities.

State appropriations are reported as nonoperating revenues by public entities.

Intangible assets are reported as a classification within capital assets by private entities.

Conditional contributions are not recognized by public or private entities.

Many endowment management policies establish a spending rate for the college or university's endowment funds. A spending rate is best defined as:

The portion of the total return that can currently be used to carry out the endowment purpose.

The average rate of return earned on the endowment investments for the current fiscal year.

The moving average rate of return earned on endowment investments over a set period of time, such as a five-year moving average.

The percentage of the endowment corpus that can be used to carry out the endowment purpose.

Which of the following is a performance measure of an outcome?

Farley College students complete an undergraduate degree in an average of 4.3 years.

A state survey of employers showed that 70 percent of employers ranked Beasley State University's graduates as “very well prepared” to enter the workforce.

Within six months of graduation, 75 percent of undergraduate students at Gravette College have a job in their field.

Faculty members at Ballard University published an average of two peer-reviewed papers each year.

Answer 1

1

Colleges and universities look to which standard-setting body for GAAP?

Answer:

It depends on whether the entity is public, private, or for-profit.

_________________________________________________________________

2

Which of the following statements is prepared by both a private and public college or university?

Answer: Statement of cash flows.

_____________________________________________________

3

Which of the following is a true statement about tuition revenue in a college or university?

Answer: c. Refunds should be reported as deductions from gross revenue

_________________________________________________________________________

4

A university expended $2,475,000 on a new parking facility. The transaction was reported as an investing activity on its direct method statement of cash flows. What type of university prepared the statement of cash flows?

Answer: Either b or c.

______________________________________________________________

5

Last year Zelnick College showed a positive revenue over expenses number for the first time in several years. The college is funded with contributions, grants, two government appropriations (state and local), and tuition and fees. Zelnick College is most likely what type of college?

Answer: A Public University engaged primarily in business-type activities

________________________________________________________________________________

6

Gresham College is a local private college. When reviewing the college's financial reports, you would expect to see which of the following categories on its statement of assets and liabilities

Answer; Unrestricted net assets, temporarily restricted net assets, and permanently restricted net assets.

____________________________________________________________________________________

7

How would a university account for funds received from an external donor that are to be retained and invested, with the related earnings restricted to the purchase of library books?

Answer:

No spendable, endowment in a public university.

___________________________________________________

8

Which of the following statements is incorrect concerning the financial reports of colleges and universities?

Answer:

Intangible assets are reported as a classification within capital assets by private entities.

___________________________________________________

9

Many endowment management policies establish a spending rate for the college or university's endowment funds. A spending rate is best defined as:

Answer:

A. The portion of the total return that can currently be used to carry out the endowment purpose.

_______________________________________________

10

Which of the following is a performance measure of an outcome?

Answer:

A state survey of employers showed that 70% of employers ranked Beasley State University's graduates as "very well prepared" to enter the workforce.