Question

The following are short answer-type questions about not-for-profit colleges or universities. Remember to cite your source. 1. For purposes of external reporting, which generally accepted accounting principles are applicable to private colleges and universities? Examples would be FASB, GASB, and/or other accounting. 2. For purposes of external reporting, which accounting principles are applicable to public (governmental) colleges or university? Examples would be FASB, GASB, and/or other accounting. 3. Where and how should public (governmental) colleges or universities report state appropriations? Explain what state appropriations are. 4. Dorian College, a not-for-profit institution, issued $20,000,000 in revenue bonds. Per the terms of the bond indenture, the college must maintain a cash reserve of $800,000 – which is equal to six months of interest. How should the cash that is set aside be classified? 5. What is an auxiliary enterprise? Explain and give an example. 6. A government university receives a grant of $2,000,000 to improve its baseball field and stands. In its statement of cash flows, where should the cash flow be shown for the grant of $2,000,000? (for example, what type of cash flow activity?) Why? 7. A not-for-profit university receives an unrestricted contrition of $200,000. In its statement of cash flows, in which activity category would the cash inflow of $200,000 be shown? Why?

Answer 1

	Answer
1. For purposes of external reporting, which generally accepted accounting principles are applicable to private colleges and universities? Examples would be FASB, GASB, and/or other accounting.	FASB
2. For purposes of external reporting, which accounting principles are applicable to public (governmental) colleges or university? Examples would be FASB, GASB, and/or other accounting.	GASB
3. Where and how should public (governmental) colleges or universities report state appropriations? Explain what state appropriations are.	Should be reported as Non Operating Revenue. State appropriations are given to help to cover institutions operating expenses.
4. Dorian College, a not-for-profit institution, issued $20,000,000 in revenue bonds. Per the terms of the bond indenture, the college must maintain a cash reserve of $800,000 – which is equal to six months of interest. How should the cash that is set aside be classified?	Should be classified as UNRESTRICTED.
5. What is an auxiliary enterprise? Explain and give an example.	Unit of college which carry out Business-Type activity are auxiliary Enterprise. Example:Bookstore/Foodstore
6. A government university receives a grant of $2,000,000 to improve its baseball field and stands. In its statement of cash flows, where should the cash flow be shown for the grant of $2,000,000? (for example, what type of cash flow activity?) Why?	Capital Financing activities
7. A not-for-profit university receives an unrestricted contrition of $200,000. In its statement of cash flows, in which activity category would the cash inflow of $200,000 be shown? Why?	Should be reported as Operating Activities