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The private college would:


A) Record contribution revenue in the amount of $10,000 in each of the years 2009, 2010, 2011, 2012 and 2013
B) Record contribution revenue in the amount of $42,124 in 2008
C) Record contribution revenue in the amount of $42,124 in 2009
D) None of the above

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If Jimmy commits to pledging $10,000 to Greystone College in 2008 and then pays in 2009, how much revenue will Greystone College recognize in 2008?.


A) $10,000
B) $0
C) $9,000
D) $7,000

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Uncollectible tuition accounts are recorded as:


A) Bad debts expense
B) Discounts
C) Reductions in revenue
D) None of the Above

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Which of the following is true regarding accounting and financial reporting for private colleges and universities?


A) Expenses may be unrestricted or temporarily restricted depending on donor intent
B) Statement of Unrestricted Revenues, Expenses and Other Changes in Unrestricted Net Assets and a Statement of Changes in Net Assets may be presented instead of a Statement of Activities
C) The Statement of Cash Flows must use the direct method
D) None of the above is true

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B

Investment income on Endowments held by private colleges and classified as permanently restricted net assets should be recorded as an increase in:


A) Unrestricted net assets
B) Temporarily restricted net assets
C) Permanently restricted net assets
D) Any of the above, depending on the terms of the trust agreement

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Private, Not-for-Profit Colleges and Universities must have Statement of Financial Position, Statement of Activities, Statement of Cash Flows and Notes to the Financial Statements included in their financial report.

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Distinguish between (a) right endowments, (b) term endowments and (c) quasi-endowments. Explain how the net assets of each is classified by a private college or university.

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a.right endowments represent contributio...

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A donor made a gift of cash to a private college or university in 2009 with an expressed purpose restriction. All of the funds were expended in 2009. The private college or university must:


A) Record the gift as a temporarily restricted revenue, reclassify the funds to unrestricted and then report the expense as unrestricted
B) Record the gift and expense as unrestricted
C) Record the gift and expense as temporarily restricted
D) Use either of the methods described in (a) or (b)

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An acceptable alternative to the Statement of Activities for a private college or university is to present a Statement of Unrestricted Revenues, Expenses and Other Changes in Unrestricted Net Assets and a Statement of Changes in Net Assets.

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Which of the following is an example of a temporarily restricted inflow?


A) Tuition and fees
B) Auxiliary enterprises
C) Contribution for plant acquisition
D) Quasi- Endowment

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As of December 31, 2009, the contribution revenue would be classified as:


A) Unrestricted
B) Temporarily restricted
C) Permanently restricted
D) Neither of the above

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With respect to private colleges and universities, why are quasi-endowments not classified as permanently restricted net assets while true endowments are?

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Quasi-endowments are established by the ...

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Academic or athletic scholarships that do not require service to the college or university are treated as:


A) Expenses
B) Contra-Assets
C) Liabilities
D) Revenue Discount

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Plant acquired with either unrestricted or restricted resources may be (1) recorded initially as unrestricted OR (2) recorded initially as temporarily restricted and then classified in accordance with the depreciation schedule.

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Under FASB standards, true endowments are classified as Permanently Restricted Net Assets.

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True

Under NACUBO guidelines, the current period provision for uncollectible accounts should be reported as:


A) Bad debt expense
B) A reductions in revenue
C) Transfers
D) None of the above

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Universities treat athletic scholarships as a charge to the athletic department who must pay for the scholarship out of its net revenues.

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Union Seminary uses the fund basis of accounting for internal record keeping. Presented below is the fully adjusted 12/31/09 balance sheet for Union, prepared using funds and account groups. The following are fund descriptions: • Operating Fund - the fund used for transactions not falling within the definition of other funds. There are no restrictions on these resources. • Memorial Fund - Used to account for resources donated from outside parties for specific capital additions • Endowment Fund - Assets received from an outside donor for permanent investment, only the earnings may be expended. • Scholarship Fund - Cash set aside by the Seminary's governing board for use as scholarships and student aid. • Fixed Assets Account Group - A record of the Seminary's fixed assets and long-term debt. Required: Prepare a Statement of Financial Position following the guidelines provided in FASB Statements 116 and 117 for private not-for-profits and assuming Union does not classify plant assets as temporarily restricted.

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11ea7289_d971_04a0_926a_93f85e69a599_TB3349_00 \( \quad\)\( \quad\)\( \quad\)\( \quad\)\( \quad\)\(\text { UNION SEMINARY }\) \(\text { STATEMENT OF FINANCIAL POSITION }\) \( \quad\)\( \quad\)\( \quad\)\( \quad\)\( \quad\)\( \quad\)\( \quad\)\( \quad\)\(12 / 31 / 09\) \(\begin{array}{l|r} \hline \text { Assets: }\\ \text { Cash } & 79,400 \\ \text { Pledges Receivable (net) } & 231,000 \\ \text { Investments } & 190,000 \\ \text { Land \& Building (net) } & \underline{220,000} \\ {\text { Total Assets }} & 720,400\\ \hline \text { Liabilities: }\\ \text { Payroll Taxes Payable } & 12,000 \\ \text { Mortgage } & \underline{150,000} \\ \text { Total Liabilities } & 162,000\\ \hline \text { Net Assets: }\\ \text { Unrestricted } & \$ 355,900 \\ \text { Temporarily Restricted } & 12,500 \\ \text { Permanently Restricted } & \underline{190,000} \\ \text { Total Net Assets } & \underline{558,400}\\ \text { Total Liabilities and Net Assets }&\underline{\$ 720,400}\\ \end{array}\)

A donor gave a gift of $50,000 cash to a private college in 2008 with instructions that the funds be expended for psychology research. The funds were expended in 2009. The private college would recognize the $50,000 as:


A) Revenue in 2008 increasing temporarily restricted net assets; recognize the expense in 2009 and reclassify the resources from temporarily restricted net assets to unrestricted net assets in 2009
B) Deferred revenue in 2008 and as revenue in 2009, increasing unrestricted net assets. The expense would be recognized in 2009
C) Deferred revenue in 2008 and as revenue in 2009, increasing temporarily restricted net assets. The expense would be recognized also in 2009 and the resources would be reclassified from temporarily restricted net assets to unrestricted net assets in 2009
D) Either (b) or (c) , depending upon the policy of the private college

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Private colleges and universities are governed by which of the following?


A) FASB
B) GASB
C) FASB and GASB
D) Neither FASB nor GASB

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