Question 1

Answer the following related to accounting and financial reporting for public colleges and universities:
a. What choices exist for financial reporting by public colleges and universities, according to GASB Statement 35?
b. Indicate the contents required for a financial report for those public colleges and universities that choose to report as special-purpose entities engaged only in business-type activities.

Accepted Answer

a. GASB Statement 35 indicates that public colleges and universities may choose reporting as special-purpose entities engaged in (1) governmental and business-type activities, (2) governmental activities only or (3)business-type activities only.
b. Public colleges and universities choosing to report as special-purpose entities engaged in business-type activities only would include, in their financial reports: (1) Management's Discussion and Analysis, (2) Statement of Net Assets or Balance Sheet, (3) Statement of Revenues, Expenses and Changes in Net Assets, (4) Statement of Cash Flows, (5) Notes to the Financial Statements and (6) Required Supplementary Information Other than MD&A, when applicable. Item (6) could include schedules for pension plans and investment trust funds and information relating to the modified approach for infrastructure reporting. Budgetary Schedules are not required.

Question 2

Most public colleges and universities choose to report as special purpose entities engaged in only business-type activities.

Accepted Answer

A) True 
 B)False  True

Question 3

General-purpose governments are those that offer more than one type of basic governmental service, while special-purpose entities generally provide a limited or single, set of programs or services.

Accepted Answer

A) True 
 B)False  True

Question 4

Which of the following would be true regarding the Statement of Net Assets for a public college reporting as a special purpose entity engaged in business type activities only?

Accepted Answer

A)   A classified statement is required, separating current and long-term assets and liabilities
B)   The two net asset categories are restricted and unrestricted
C)   Both of the above are true
D)   Neither of the above is true

Question 5

What are the criteria outlined in GASB Statement 39 for requiring public college foundations to be reported as discretely presented components in the college's financial reports?

Accepted Answer

The answer of What are the criteria outlined in GASB...

Question 6

What are the required parts of the annual financial report for special-purpose local governments engaged only in business-type activities?

Accepted Answer

The answer of What are the required parts of the...

Question 7

Public higher education institutions are allowed to report as special-purpose entities engaged in governmental and business-type activities or in governmental-type activities only.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is true regarding the Statement of Revenues, Expenses and Changes in Net Assets for a public college?

Accepted Answer

A)   All student scholarship allowances should be reported as operating expenses
B)   An all-inclusive statement should be prepared, ending with the net assets at year-end
C)   Both of the above are true
D)   Neither of the above is true

Question 9

Northern University operates a bookstore. The bookstore had revenues in the amount of $2,650,000. What is the journal entry to record this event? 
A.
$\begin{array}{lccc}
  \text {Cash and Cash Equivalents}&2,650,000\
  \text {Operating Revenues - Auxiliary Enterprises}&& 2,650,000\
\end{array}$

B.
$\begin{array}{lccc}
  \text {Cash }&2,650,000\
  \text {Operating Revenues - Restricted }&& 2,650,000\
\end{array}$

C.
$\begin{array}{lccc}
  \text {Cash and Cash Equivalents}&2,650,000\
  \text {Due to General Fund}&& 2,650,000\
\end{array}$

D.
$\begin{array}{lccc}
  \text {Cash}&2,650,000\
  \text {Due to Auxiliary Enterprise Fund}&& 2,650,000\
\end{array}$

Accepted Answer

A)   Choice A
B)   Choice B
C)   Choice C
D)   Choice D

Question 10

GASB clearly defines the criteria when determining whether a government is general-purpose or special-purpose.

Accepted Answer

A) True 
 B)False

Question 11

Public colleges who waive fees for graduate assistants must report tuition income net of the fees waived.

Accepted Answer

A) True 
 B)False

Question 12

Special-purpose governments that are engaged in both governmental and business-type activities are required to use the full reporting model including MD&A, government-wide and fund-basis statements, notes to the financial statements and RSI.

Accepted Answer

A) True 
 B)False

Question 13

Public colleges who waive fees for graduate assistants must report tuition at the gross amount and expense the fees waived.

Accepted Answer

A) True 
 B)False

Question 14

State appropriations for higher education institutions are to be reported as non operating revenues in the Statement of Revenues, Expenses and Changes in Net Assets.

Accepted Answer

A) True 
 B)False

Question 15

What is the journal entry to record the graduate assistantships?

$\begin{array}{lccc}
  \text { A. Scholarships and Fellowships Expense } & 900,000 & \
\quad \text { Accounts receivable } & & 900,000 \
\end{array}$

$\begin{array}{lccc}
  \text { B. Operating Revenue Deduction -Scholarship } & & \
\quad \text { Allowances } & 900,000 & \
\quad \text { Accounts Receivable } & &900,000 \
\end{array}$

$\begin{array}{lccc}
  \text { C. Operating Revenue Deduction -Scholarship } & & \
\quad \text { Allowances } & 900,000 & \
\quad \text { Deferred Revenues } && 900,000 \
\end{array}$
D.Not recorded because it was deducted from tuition revenue before revenue it was recorded

Accepted Answer

A)   Choice A
B)   Choice B
C)   Choice C
D)   Choice D

Question 16

Which of the following is true regarding the Statement of Cash Flows for a public college?

Accepted Answer

A)   Cash received for interest is reported as an increase in cash flows from investing activities
B)   Cash paid for interest is reported as a decrease in cash flows from either noncapital or capital and related financing activities
C)   Both of the above are true
D)   Neither of the above is true

Question 17

Public colleges and universities follow __________ guidelines while private colleges and universities follow ________ guidelines

Accepted Answer

A)   GAO, FASB
B)   FASB, GAO
C)   FASB, GASB
D)   GASB, FASB

Question 18

What are the required parts of the annual financial reports for special-purpose governments that manage one or more retirement plans?

Accepted Answer

The answer of What are the required parts of the...

Question 19

Which of the following is true regarding the Statement of Cash Flows for a public college?

Accepted Answer

A)   The direct method must be used
B)   The statement is in the same format required for state and local governmental enterprise funds
C)   Both of the above are true
D)   Neither of the above is true

Question 20

Indicate the financial reporting rules for each of the following special-purpose entities (which category of special-purpose entity) and indicate the financial statements that would be required:
a. A township that assesses property for taxation, provides road maintenance and provides welfare assistance.
b. A fire protection district that engages in protection of property in unincorporated areas from fires.
c. An independent tollway authority, not the component unit of any other government.
d. An independent statewide pension plan.
e. A public college.

Accepted Answer

The answer of Indicate the financial reporting rules for each...

Exam 9: Accounting for Special-Purpose Entities, Including Public Colleges and Universities

Most public colleges and universities choose to report as special purpose entities engaged in only business-type activities.

General-purpose governments are those that offer more than one type of basic governmental service, while special-purpose entities generally provide a limited or single, set of programs or services.

Which of the following would be true regarding the Statement of Net Assets for a public college reporting as a special purpose entity engaged in business type activities only?

What are the criteria outlined in GASB Statement 39 for requiring public college foundations to be reported as discretely presented components in the college's financial reports?

What are the required parts of the annual financial report for special-purpose local governments engaged only in business-type activities?

Public higher education institutions are allowed to report as special-purpose entities engaged in governmental and business-type activities or in governmental-type activities only.

Which of the following is true regarding the Statement of Revenues, Expenses and Changes in Net Assets for a public college?

GASB clearly defines the criteria when determining whether a government is general-purpose or special-purpose.

Public colleges who waive fees for graduate assistants must report tuition income net of the fees waived.

Special-purpose governments that are engaged in both governmental and business-type activities are required to use the full reporting model including MD&A, government-wide and fund-basis statements, notes to the financial statements and RSI.

Public colleges who waive fees for graduate assistants must report tuition at the gross amount and expense the fees waived.

State appropriations for higher education institutions are to be reported as non operating revenues in the Statement of Revenues, Expenses and Changes in Net Assets.

Which of the following is true regarding the Statement of Cash Flows for a public college?

Public colleges and universities follow __ guidelines while private colleges and universities follow guidelines

What are the required parts of the annual financial reports for special-purpose governments that manage one or more retirement plans?

Which of the following is true regarding the Statement of Cash Flows for a public college?