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

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Question 1

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Revenue sources for public colleges include tuition and fees and donations.All other income is reported as unrelated business income.

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Question 2

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

A) Tuition revenues are reported net of tuition waivers when those waivers require service on the part of the recipient student.
B) Depreciation expense is recognized.
C) Both of the above are true.
D) Neither of the above is true.

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Question 3

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GASB requires that educational institutions who engage in business-type activities and issue debt account for the debt by:

No public colleges have the power to issue debt; it must be issued by the state as general obligation debt.

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

According to GASB Statement 34,governmental activities are generally financed through taxes,intergovernmental revenues and other nonexchange revenues.

Which of the following is true regarding financial reporting of special-purpose entities?

Higher education institutions that report as special purpose entities engaged in business-type activities only should report the same net asset classifications (invested in capital assets,net of related debt,restricted,unrestricted)as are reported in the government-wide statement of net assets.

According to the National Association of College and Business Officers,scholarship discounts and allowances paid by institutional funds:

With respect to public colleges and universities,expenses are reported by:

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.

Special-purpose governments that are engaged in both governmental and business-type activities or in more than one governmental activity are required to include which items in its financial reporting?

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.

According to GASB Statement 33,with respect to public colleges and universities,pledges receivable are recognized as assets and revenues when eligibility requirements are met.

A public college had tuition and fees for the year ended June 30,2014 in the amount of $45,000,000.Scholarships,for which no services were required,amounted to $2,500,000.Graduate assistantships,for which services were required,amounted to $2,300,000.The amount to be reported by the college for net tuition and fee revenue would be:

Public colleges and universities are required to report as special purpose entities engaged in both governmental- and business-type activities because they receive tax dollars and charge user fees.

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

Governmental health care entities,public school systems,and museums are commonly accounted for as special-purpose governments.

Public colleges must report tuition income net of athletic scholarships.

Which of the following is true regarding financial reporting of special-purpose entities?