Multiple Choice. Choose the best answer.
1. Under GASB standards, public colleges and universities engaged only in business-type activities present all of the following statements in their stand-alone reports except a:
a. Statement of net assets.
b. Statement of revenues, expenses, and changes in net assets.
c. Statement of revenues, expenditures, and changes in fund balances.
d. Statement of cash flows.
2. Which of the following statements is not prepared by a private college or university?
a. Statement of financial position.
b. Statement of cash flows.
c. Statement of activities.
d. Statement of comprehensive income.
3. Which of the following is a true statement about tuition revenue in a college or university?
a. Scholarships should always be reported as expenses.
b. Tuition receivables estimated to be uncollectible should be reported as an operating expense.
c. Refunds should be reported as deductions from gross revenue.
d. All of these statements are true.
4. A college expended $2,475,000 on a new parking facility. How would this be reported in the statement of cash flows?
a. As an investing activity by a public college.
b. As a capital and related financing activity by a private college.
c. As an investing activity by a private college.
d. Both a and c are correct.
5. Funds that the governing board of a public university has set aside so that only the income earned on the assets is expendable are called:
a. Term endowments.
b. Designated, unrestricted net assets.
c. Life income fund agreements.
d. Permanently restricted net assets.
6. If during the year a college or university expends federal awards such as research grants. it is required to:
a. Have a single audit in accordance with the provisions of OMB Circular A—133 if expenditures have exceeded $500,000.
b. Follow OMB Circular A—21, “Cost Principles for Educational Institutions.”
c. Follow federal uniform administrative requirements under OMB Circular A—110.
d. Do all of the above.
7. Accounting for public colleges and universities and universities differs in that:
a. Net assets are classified differently.
b. Depreciation is reported differently.
c. Collections are reported differently.
d. Only private colleges and universities report value.
8. Under generally accepted accounting principles applicable to public universities, the monies resulting from a new library construction fund drive would be recorded as increases to:
a. Unrestricted net assets.
b. Permanently restricted net assets.
c. Temporarily restricted net assets.
d. Restricted net assets.
9. Funds received from an external donor that are to be retained and invested, with the related earnings restricted to the purchase of library books, would be accounted for as an increase to:
a. Temporarily restricted net assets in a private university.
b. Nonexpendable, restricted net assets in a public university.
c. Unrestricted net assets in either a public or private university.
d. Permanently restricted net assets in a public university.
10. Which of the following statements helps define an irrevocable split-interest agreement?
a. The college is sharing the income from investments with a donor.
b. The college is maintaining the donation indefinitely.
c. The college is reporting the donation as a liability.
d. The college is receiving all of the income from the investments.