Question 1

Kelsey Nicholas contributes $80,000 to Wagner University requesting that she receive $5,000 annually for the rest of her life, after which, the university may spend the funds as it sees fit. The journal entry to record this gift would include:

Accepted Answer

There would be a debit to cash in the amount of $80,000. The present value of the expected payments over Kelsey's lifetime would be credited to Annuities Payable. Any difference would be credited to Revenues - Temporarily Restricted Contribution.

Question 2

Income earned on restricted endowment resources should

Accepted Answer

Income earned on restricted endowment resources is recorded directly in the fund the donor has specified should reap the benefits.

Question 3

Government grants, like Pell Grants, which are essentially pass through financial aid to students are accounted for as

Accepted Answer

Agency funds account for resources that are not the property of the university, but are held in its custody. Federal monies, such as Pell Grants , that pass through the university to student recipients, are accounted for as agency transactions.

Question 4

In the Statement of Cash Flow for a private not-for-profit college, endowment contributions are included in cash flows provided by (used for) ____________ activities.

Accepted Answer

In the Statement of Cash Flow for a private not-for-profit college, endowment contributions are included in cash flows provided by (used for) financing activities.

Question 5

A life income fund is used when:

Accepted Answer

A life income fund is used if all income received on contributed assets is to be paid to the donor or other specified recipient for life.

Question 6

The quasi-endowment fund of a university would account for funds set aside by

Accepted Answer

Quasi-endowments are funds set aside by the board or controlling body, usually from unrestricted funds.

Question 7

With the adoption of GASB statement #35 in 1999, governmental health care organizations are required to report their activities in a manner more like a(n):

Accepted Answer

Governmental health care organizations are expected to follow the model for public institutions engaged in business-type activities. Thus, their activities are reported in a manner like an enterprise fund.

Question 8

What is the basis of accounting used in accounting for not-for-profit health care organizations?

Accepted Answer

Private not-for-profit health care organizations use the accrual basis of accounting as outlined in chapter 18.

Question 9

Westwood College is a small private college while neighboring Bridgetown University is a public institution. How is each to report its investments?

Accepted Answer

The answer of Westwood College is a small private college...

Question 10

A public college or university would provide which of the following combinations of financial statements to their users?

Accepted Answer

The financial statements required for public colleges and universities are the statement of revenues, expenses, and changes in net assets, the statement of net assets and the statement of cash flows.

Question 11

Which of the following financial statements is required for the annual financial reports of public colleges and universities?

Accepted Answer

The financial statements required for public colleges and universities are the statement of revenues, expenses, and changes in net assets, the statement of net assets and the statement of cash flows.

Question 12

Frank Bowers decides to contribute $1,000,000 to his alma mater. Cape University agrees to pay Frank a fixed amount every month for the next 20 years in exchange for the donation. Frank's donation would be accounted for in the

Accepted Answer

Resources accepted by a university under the stipulation that periodic payments are to be made to the donor are recorded in the annuity fund.

Question 13

A public university's long-term bonds issued to build dormitories would be recorded in the

Accepted Answer

Plant assets and related long-term debt are recorded in the Plant Fund.

Question 14

Currently, which organization has jurisdiction over accounting and reporting standards for private colleges and universities?

Accepted Answer

The Financial Accounting Standards Board has jurisdiction over accounting and reporting standards for private colleges and universities. The Governmental Accounting Standards Board has jurisdiction over public colleges and universities.

Question 15

In the Statement of Cash Flow for a public college or university, endowment contributions are included in cash flows provided by (used for) ____________ activities.

Accepted Answer

In the Statement of Cash Flow for a private not-for-profit college, endowment contributions are included in cash flows provided by (used for) noncapital financing activities.

Question 16

A private not-for-profit college or university would provide which of the following combinations of financial statements to their users?

Accepted Answer

The financial statements required for private not-for-profit colleges and universities are the statement of activities, the statement of financial position and the statement of cash flows.

Question 17

In which of the plant fund subgroups would you find the following transaction: A bond principal payment is made on a bond that was issued with the proceeds being designated for construction of a new athletic facility?

Accepted Answer

Plant fund for retirement of indebtedness accounts for the resources accumulated for the payment of interest and principal of plant fund indebtedness.

Question 18

Farley College budgets funds for the maintenance and repair of its buildings. Where would these funds be accounted for?

Accepted Answer

Plant fund for renewals and replacements accounts for resources that are available to keep the physical plant in operating condition.

Question 19

Which of the following is a category of health care entity?

Accepted Answer

Health care units fall into three categories as classified by sponsorship or equity structure:
1. Investor-owned (or proprietary) entities.
2. Governmental (or public) entities.
3. Voluntary not-for-profit health care entities.

Question 20

The Great Gap University issues long-term debt to build a bridge over the gap between its two main campuses. The debt would be accounted for in the

Accepted Answer

The investment in plant subgroup accounts for all plant assets and related long-term debt.

Quiz 19: Accounting for Not-For-Profit Colleges and Universities and Health Care Organizations