Question
A nongovernmental not-for-profit university in California charges its students tuition of $10,000,000. However, financial aid grants total $2,200,000. In addition, the school receives a $1,000,000
A nongovernmental not-for-profit university in California charges its students tuition of $10,000,000. However, financial aid grants total $2,200,000. In addition, the school receives a $1,000,000 grant restricted for faculty salaries. Of this amount, $300,000 is spent appropriately this year. On the statement of activities, the school reports three categories: (1) revenues and support, (2) net assets released from restrictions, and (3) expenses. Which of the following is not true?
a. Net assets without donor restrictions shows the 2,200,00 as direct reduction to the tuition revenue balance.
b. In the net assets without donor restriction, the revenues and support should total 10,000,000
c. Net asset without donor restriction should recognize expenses of 300,000
d. Net assets without donor restrictions should show an increase of 300,000 for net assets reclassified.
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