Exam 11: College and University Accounting

Private colleges and universities are required to report net assets within the categories of unrestricted,temporarily restricted and permanently restricted.

A Pooled life income fund is a split-interest agreement.

A private university received $18,000,000 in tuition and fees during an academic year.Graduate assistantships,for which services were required,were awarded in the amount of $1,200,000.Scholarships,for which no services were required,were awarded in the amount of $1,400,000.The net tuition and fees that would be reported in the Statement of Activities would be:

Plant acquired by a private college 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.

The FASB has the authority to set accounting standards for all of the following organizations except:

Private colleges and universities use the same accounting and reporting standards as other private not-for-profit organizations.

Private colleges and universities are required to report net assets in the same manner as investor-owned proprietary schools.

A Charitable lead trust is a split-interest agreement.

Private colleges are required to report net assets in the following categories:

When a private college or university has a foundation,and that foundation receives contributions specifically directed for the benefit of the college or university,

Record the following transactions on the books of Franklin College,a private college.All of the transactions are for the year 2012. (a)The College received $450,000 in funds that were pledged in 2011,to be used for unrestricted purposes in 2012. (b)The College was awarded $900,000 in grants that are to be used for restricted research purposes.$600,000 in cash was received,and $580,000 was expended on these projects. (c)On Dec.1,the College received a pledge of $2,300,000 to build a new basketball arena.The funds were not expended or received in 2012,but are expected to be received early in 2013. (d)The College had received cash of $500,000 in 2011 to be used to purchase computer equipment for the student labs.The equipment was purchased and put into service in early January 2012.The equipment has a five-year life and the College follows the practice of maintaining the balance of fixed assets (net of depreciation)in the temporarily restricted net asset category. (e)On Dec.31,the College received an unrestricted pledge to receive $100,000 per year each year for six years,beginning on December 31,2012.The first installment of $100,000 was received on that date.The discount rate is 6%.The present value of six payments of $100,000 is $521,240.

Only not-for-profit organizations follow FASB guidelines AND report the equity as unrestricted,temporarily restricted,or permanently restricted.

An alum commits to pledging $10,000 to Greystone College in 2011 and then pays in 2012,how much revenue will Greystone College recognize in 2011?

College and universities treat uncollectible accounts as reductions in revenue,rather than bad debt expense.

Tuition revenue for summer classes spanning two fiscal periods must be allocated on a pro-rata basis.

As of December 31,2011,the contribution revenue would be classified as:

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

Funds that are restricted for a certain number of years and then released are considered to be quasi-endowments and are classified as temporarily restricted funds by private colleges and universities.

The Financial Accounting Standards Board is responsible for the standards setting for privately owned universities.

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