Exam 11: College and University Accounting

In 2012,a major drug company agreed to give a not-for-profit private college $1,700,000 to perform testing of a new drug.An advance payment of $700,000 was received in 2012.The college was to receive $4,000 per individual test.In 2012,the college completed 100 tests.How much revenue should the college report for 2012?

According to the rules for accounting for colleges and universities under the jurisdiction of the FASB,depreciation is recorded.When reporting by function,depreciation is allocated to functional categories.

If the receivable for a student is $9,000 and the student pays only $1,000 as the result of receiving an assistantship from the school,what would be the appropriate debit(s)?

According to the rules for accounting for colleges and universities under the jurisdiction of the FASB,expenses are reported by function,either in the statements or in the notes.

Which of the following is true regarding the investments of private colleges in securities with determinable fair values?

Financial statements prepared for private colleges and universities present net assets as: unrestricted,restricted,or invested in capital assets net of related debt.

For private colleges and universities,reclassifications of temporarily restricted and unrestricted net assets could be made:

Public colleges and universities are subject to standards issued by:

A charitable remainder trust and a charitable gift annuity differ in that no formal trust agreement exists for a charitable gift annuity.

What are the reporting options for the Statement of Financial Position of institutions of higher education as outlined by the NACUBO Financial Accounting and Reporting Manual for Higher Education?

According to the rules for accounting for colleges and universities under the jurisdiction of the FASB,multiyear pledges are recorded as restricted revenue and receivable for the gross amount of the pledge when the pledge is made.

According to the FASB,plant acquired by colleges and universities with either unrestricted or restricted resources are recorded as:

According to the rules for accounting for colleges and universities under the jurisdiction of the FASB,investments in stock with determinable fair values and all debt securities are reported at market value.

A donor made a gift of cash to a private college or university in 2012 with an expressed purpose restriction.All of the funds were expended in 2012.The private college or university must:

FASB standards require private colleges and universities to use encumbrances.

In addition to a Statement of Financial Position and a Statement of Activities,a private college or university is required to present:

If the receivable for a student is $8,000 and the student pays only $500 as the result of receiving an athletic scholarship from the school,what would be the appropriate debit(s)?

Union Seminary uses the fund basis of accounting for internal record keeping.Presented below is the fully adjusted 12/31/2012 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.

A private college received a $2,000,000 gift from a donor.The college's governing board voted to use the $2,000,000 to establish an endowment,with the intent to keep the principal intact forever.The income from the endowment was to be used to fund research in the biology department.How should the college classify the $2,000,000 gift?

NACUBO has issued a position paper titled "Accounting and Reporting Scholarship Allowances to Tuition and Other Revenues by Higher Education" to address the issue of scholarship allowances.How are scholarships and allowances treated in the financial statements by private colleges and universities?