Terms in this set (24)

State educational appropriations received by a public university are classified as which of the
following on the statement of revenues, expenses, and changes in net position?
A) Increase in unrestricted net position.
B) Operating revenue.
C) Other financing source.
D) Nonoperating revenue.
D) Nonoperating revenue.
Tuition scholarships for which there is no intention of collection from the student should be
classified by a private university as
A) Revenues and expenditures.
B) Reductions of gross revenue to arrive at net revenue.
C) Revenues and expenses.
D) Reductions of gross revenue or as expenses provided they are consistently classified in the
same manner from year to year.
B) Reductions of gross revenue to arrive at net revenue.
Culver City College, a public college, has a 10-week summer session that starts on June 25,
2017, so that one week is held during FY 2017 and the other nine weeks meet during FY 2018.
Tuition and fees in the amount of $1,000,000 were collected from students for classes to be
conducted in this session. What amount should Culver City College recognize as unrestricted
revenue in each of the years ended (FYE) June 30, 2017 and June 30, 2018?
FYE 2017 FYE 2018
A. $ 100,000 $ 900,000
B. $ 0 $ 1,000,000
C. $ 1,000,000 $ 0
D. $ 500,000 $ 500,000
A) Choice B.
B) Choice D.
C) Choice A.
D) Choice C.
C) Choice A.
Which of the following items would not affect the amounts reported in the Revenues and Gains
section of the statement of activities for a private college or university?
A) Deferred revenues.
B) Tuition and fees discounts and allowances.
C) Student tuition and fees.
D) Net assets released from restriction.
A) Deferred revenues.
Cactus College, a small private college, received a research grant from NACUBO to study
whether service efforts and accomplishments measures improve institutional performance. In
accordance with FASB standards the grant would be reported as an increase in:
A) Permanently restricted net assets.
B) Unrestricted designated net assets.
C) Temporarily restricted net assets.
D) Unrestricted net assets.
C) Temporarily restricted net assets.
Nongovernmental (private) colleges and universities should follow FASB standards;
governmental (public) colleges and universities should follow GASB standards.
True or False
True
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.
True or False
True
Private colleges and universities report term endowments as permanently restricted net assets
until the term has expired.
True or False
False
Earnings on a private college's endowment investments may increase unrestricted or temporarily
restricted net assets, or both.
True or False
True
Tuition refunds are recorded by debiting Tuition and Fees-Unrestricted.
True or False
True
When a loan is made (e.g., $1,000 loan)
Dr: Loan Receivable 1,000
Cr: Cash 1,000
a $100 refundable deposit was received
Dr: Cash 100
Cr: Deposits held in custody fro others 100
For example - gross T&F was $5,000, with $250 given in scholarships
Dr: Tuition & Fees Receivable 4,750
Dr: Tuition & Fees Discounts & Allowance 250
Cr: Tuition & Fees- Unrestricted 5,000
The fiscal year of a college ends July 31. In June 2013 a college collects $120 million in tuition
and fees for its summer semester that begins on June 3 and ends on August 16.

It also collects $180 million for the following fall semester, which begins on September 3rd.
Faculty salaries applicable to summer session courses are $10 million. Of this amount, $8 million
are applicable to June and July and $2 million to August.
To Recognize Revenue:
Dr: Cash 120 Million
Cr: Revenue 96 Million
Cr: Deferred Revenue 24 Million

To Record Faculty Salaries:

Dr: Faculty Salary Expense 8 Million
Cr: Cash 8 Million

To Record Tuition & Fees applicable to Fall Semester:

Dr: Cash 180 Million
Cr: Deferred Revenue 180 Million
Colleges and universities look to which standard-setting body for GAAP?
a. The GASB.
b. The FASB.
c. The NACUBO.
d. It depends on whether the entity is public, private, or for-profit
d. It depends on whether the entity is public, private, or for-profit
Which of the following statements is prepared by both a private and public college or university?
a. Statement of net assets.
b. Statement of cash flows.
c. Statement of activities.
d. Statement of net position.
b. Statement of cash flows.
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.
c. Refunds should be reported as deductions from gross revenue.
A university expended $2,475,000 on a new parking facility. The transaction was reported as an
investing activity on its direct method statement of cash flows. What type of university prepared
the statement of cash flows?
a. A public university.
b. A for-profit university.
c. A private university.
d. Either b or c.
d. Either b or c.
Last year Zelnick College showed a positive revenue over expenses number for the first time in
several years. The college is funded with contributions, grants, two government appropriations
(state and local), and tuition and fees. Zelnick College is most likely what type of college?
a. A private for-profit college.
b. A private not-for-profit college.
c. A public university engaged primarily in governmental activities
d. A public university engaged primarily in business-type activities.
d. A public university engaged primarily in business-type activities.
Gresham College is a local private college. When reviewing the college's financial reports, you
would expect to see which of the following categories on its statement of assets and liabilities?
a. Unrestricted net assets, temporarily restricted net assets, and permanently restricted net assets.
b. Unrestricted net position, temporarily restricted net position, and permanently restricted net
position.
c. Unrestricted net position, restricted net position, and net investment in capital assets.
d. Unrestricted net assets, restricted net assets, and net investment in capital assets.
a. Unrestricted net assets, temporarily restricted net assets, and permanently restricted net assets.
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. Unrestricted net assets/position in either a public or private university.
c. Permanently restricted net position in a public university.
d. Nonexpendable, restricted net position in a public university.
d. Nonexpendable, restricted net position in a public university.
Which of the following statements is incorrect concerning the financial reports of C&U?
a. The NACUBO chart of accounts is frequently used for reporting revenuesand expenses by
both private and public entities.
b. State appropriations are reported as nonoperating revenues by public entities.
c. Intangible assets are reported as a classification within capital assets by private entities.
d. Conditional contributions are not recognized by public or private entities.
c. Intangible assets are reported as a classification within capital assets by private entities
Many endowment management policies establish a spending rate for the C&U endowment funds.
A spending rate is best defined as:
a. The portion of the total return that can currently be used to carry out the endowment purpose.
b. The average rate of return earned on the endowment investments for the current fiscal year.
c. The moving average rate of return earned on endowment investments over a set period of time,
such as a five-year moving average.
d. The percentage of the endowment corpus that can be used to carry out the endowment
purpose.
a. The portion of the total return that can currently be used to carry out the endowment purpose.
Which of the following is a performance measure of an outcome?
a. Farley College students complete an undergraduate degree in an average of 4.3 years.
b. A state survey of employers showed that 70 percent of employers ranked Beasley State
University's graduates as "very well prepared" to enter the workforce.
c. Within six months of graduation, 75 percent of undergraduate students at Gravette College
have a job in their field.
d. Faculty members at Ballard University published an average of two peer-reviewed papers each
year.
b. A state survey of employers showed that 70 percent of employers ranked Beasley State
University's graduates as "very well prepared" to 
 1. The AICPA Audit and Accounting Guide Health Care Entities is considered category b
authoritative guidance that can be used by which of the
following?
a. A business-type government hospital.
b. A not-for-profit hospital.
c. A for-profit hospital.
d. All of the above.

Terms in this set (10)

b.

The AICPA Audit and Accounting Guide Health Care Entities is considered category b
authoritative guidance that can be used by which of the following?

a. A for-profit hospital.
b. A business-type government hospital.
c. A not-for-profit hospital.
d. All of the above.

a.

A not-for-profit hospital would present all of the following financial statements, except a:

a. Statement of functional expenses.

b. Statement of operations.
c. Statement of cash flows.
d. Balance sheet or statement of financial position.

b.

Which of the following is a true statement regarding a performance indicator?

a. Only governmental health care organizations are required to report a performance indicator.
b. The purpose of reporting a performance indicator is to make it easier to compare the results
of operations of not-for-profit health care organizations to those of for-profit health care
organizations.
c. All health care organizations are required to report a performance indicator.
Td. he purpose of reporting a performance indicator is to assist in evaluating the efficiency and
effectiveness of a health care organization's operating activities.

a.

Fees received by a hospital for a "healthy heart" workshop offered to patients should be
reported as:

a. Other revenue.
b. Administrative service revenue.
c. Patient service revenue.
d. Nonoperating gains.

c.

Which of the following is an example of an asset limited as to use?

a. Investments bequeathed to the health care organization where the income is to be used to
fund operating costs for a cancer clinic.
b. Real estate donated to build a clinic for the homeless.
c. Funds from a sale of bonds that are required by covenant to be used to build a new hospital.
d. Cash contributed which the board is considering setting aside for self-insurance.

a.

Why are health care organizations motivated to track the actual costs of services?

a. Third-party payors contract with the organization to reimburse a set amount, and the
organization risks a loss if costs are greater than the amount reimbursed.
b. They must report their actual expenses so that third-party payors will reimburse them.
c. Any amount not reimbursed by a third-party payor or paid by the patient must be included in
the amount reported as charity care.
d. Both GASB and FASB require it.

a.
The controller for Bloomingfield Regional Hospital estimated that the uncollectible patient
accounts have increase by $152,000. The controller's journal entry included a debit to bad debt
expense and a credit to allowance for uncollectible receivables. Based on this, Bloomingfield
Regional Hospital is

a. An investor-owned health care organization.

b. Properly recording the estimate for uncollectible accounts under the FASB and GASB
standards.
c. A nongovernmental not-for-profit health care organization.
d. A governmental not-for-profit health care organization.

a.

Wellness Psychiatric Clinic received a large contribution from the family of a former patient. The
contribution came with a request that the funds be used or invested to support any activities that
the clinic felt would be best. On this not-for-profit clinic's statement of cash flows, this
contribution would be reported in which section?

a. Operating activities.
b. Investing activities.
c. Noncapital financing activities.
d. Financing activities

d.

The Patient Protection and Affordability Act, passed in 2010,

a. Is unlikely to impact accounting and financial reporting for health care organizations.
b. Requires health care organizations to implement new cost accounting systems where each
service related to a medical procedure is tracked and submitted for payment separately.
c. May or may not impact Form 990 filings for 501(c)(3) health care organizations.
d. Could impact the security and integrity of a health organization's accounting information
system.

d.

Which of the following would be most useful for evaluating the financial profitability of a not-for-
profit health care organization?

a. Current ratio.
b. Debt-to-capitalization.
c. Debt services coverage.
d. Excess margin.

THIS SET IS OFTEN IN FOLDERS WITH...

Ch. 15 Accounting for Colleges and Universiti…

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