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Unformatted text preview: Chapter 16 - Accounting for Colleges and Universities Chapter 16 Accounting for Colleges and Universities Answer Key True / False Questions 1. Nongovernmental (private) colleges and universities follow FASB standards; governmental (public) colleges and universities should follow GASB standards. TRUE 2. Public colleges and universities are considered general purpose governments and are expected to be engaged in governmental activities only for purposes of their stand-alone reports. FALSE 3. Revenues and expenses of both public and private colleges and universities are accounted for on the accrual basis. TRUE 4. An unrestricted gift that is subsequently designated by the board of regents of a public university for agricultural research would be recorded as an unrestricted contribution. TRUE 5. Contributions or grants restricted by an external donor for a particular operating purpose would be reported as increases to restricted fund balances by a public college or university engaged only in business-type activities and as an addition to temporarily restricted net assets by a private college or university. FALSE 6. College summer school revenues of a public university engaged only in business-type activities should be recognized in the fiscal year in which the term is predominantly conducted. FALSE 7. Depreciation of a residence hall should be reported as an expense in a private college's operating statement but might not be reported in the operating statement of a public college engaged only in business-type activities. FALSE 8. An unrestricted endowment established by the governing board of a public college engaged only in business-type activities is considered a permanent fund and would be reported as unrestricted net assets. FALSE 16-1 Chapter 16 - Accounting for Colleges and Universities 9. Earnings on endowment investments may increase unrestricted or restricted net assets, or both. TRUE 10. A receipt of a $500,000 gift by a private college which is stipulated by the donor to be used to endow a "chaired" professorship in accounting would be recorded as an increase in temporarily restricted net assets....
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This note was uploaded on 02/20/2012 for the course ACCTG 471 taught by Professor Muthannette during the Fall '08 term at Penn State.
- Fall '08