Question 1

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.

Accepted Answer

The answer of Public colleges and universities are required to...

Question 2

Tuition waived for work-study and graduate assistants is deducted from student fee revenue when preparing a Statement of Revenues,Expenses,and Changes in Net Assets.

Accepted Answer

The answer of Tuition waived for work-study and graduate assistants...

Question 3

Most public colleges and universities choose to report as special purpose entities engaged in only business-type activities.

Accepted Answer

This statement is true. Many public colleges and universities report as special purpose entities engaged in only business-type activities in their financial statements. This is because they operate certain auxiliary services such as housing, dining, and bookstore sales that generate revenue and function similarly to private businesses.

Question 4

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

Accepted Answer

The answer of Revenue sources for public colleges include tuition...

Question 5

Sometimes,but not always public colleges are included as component units in the state CAFR

Accepted Answer

This is true, as public colleges are often considered part of the overall state government structure and may be included in the state's Comprehensive Annual Financial Report (CAFR) as a separate component unit. However, this may vary depending on the specific state and their reporting requirements.

Question 6

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

Accepted Answer

The answer of No public colleges have the power to...

Question 7

For financial reporting purposes,governmental health care entities,public school systems,other not-for-profit entities and public colleges and universities may be considered to be special-purpose entities.

Accepted Answer

Yes, these entities may be considered as special-purpose entities for financial reporting purposes.

Question 8

Public institutions of higher education are required to produce a Statement of Cash flows in addition to a Statement of Net Assets and a Statement of Revenues,Expenses,and Changes in Net Assets.

Accepted Answer

This is a true statement. Public institutions of higher education are required to produce a Statement of Cash Flows as a part of their financial reporting. This statement shows the inflow and outflow of cash during the specified period and is a crucial component in assessing the financial health of the institution.

Question 9

GASB Statement 35 extends the provisions of GASB Statement 34 to both public and private colleges and universities.

Accepted Answer

GASB Statement 35 only applies to public colleges and universities, not private ones.

Question 10

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.

Accepted Answer

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

Question 11

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

Accepted Answer

State appropriations are considered nonoperating revenues because they are not directly related to the operating activities of the institution, such as tuition and fees or grants and contracts. They are typically classified separately in the financial statements to provide a clearer picture of the institution's financial position and performance.

Question 12

Public higher education institutions typically report as special-purpose entities engaged in governmental and business-type activities or in governmental-type activities only.

Accepted Answer

Most public colleges and universities report as special purpose governments engaged in business-type activities.

Question 13

Tuition waived for academic and athletic scholarships is deducted from student fee revenue when preparing a Statement of Revenues,Expenses,and Changes in Net Assets.

Accepted Answer

This is correct. Tuition waived for scholarships is considered revenue lost, so it is deducted from the total revenue when preparing financial statements.

Question 14

Public higher education institutions that report as special-purpose entities engaged in business-type activities only are still required to prepare a Management's Discussion and Analysis.

Accepted Answer

Even though public higher education institutions that report as special-purpose entities engaged in business-type activities only are not required to prepare financial statements in accordance with generally accepted accounting principles (GAAP), they are still required to provide a Management's Discussion and Analysis (MD&A) as part of their financial reporting obligations. This communication provides key insights into the institution's financial health, plans for the future, and other relevant information that can help stakeholders understand the institution's operations and performance.

Question 15

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

Accepted Answer

These entities are typically classified as special-purpose governments because they provide specific services to the community and operate independently from general-purpose governments.

Question 16

GASB Statement 39:
 Determining Whether Certain Organizations Are Component Units requires most public college foundations to be reported as discretely presented component units in the college's financial reports.

Accepted Answer

GASB Statement 39 requires most public college foundations to be reported as discretely presented component units in the college's financial reports.

Question 17

GASB requirements for business-type activities of public colleges requires accrual of interest and amortization of debt discount and premium.

Accepted Answer

GASB Statement No. 34 requires public colleges to apply accrual accounting principles to their business-type activities, including the accrual of interest and the amortization of debt discount and premium.

Question 18

General state appropriations are treated as nonoperating revenue of public colleges and universities.

Accepted Answer

General state appropriations are typically considered nonoperating revenue for public colleges and universities because they are not generated by the institution's primary activities (such as tuition and fees). Instead, they are funds provided by the state government to support the institution's operations.

Question 19

Public colleges typically report as special-purpose entities engaged only in business-type activities.

Accepted Answer

Public colleges are typically classified as special-purpose entities engaged only in business-type activities, meaning they exist to provide education as a service and operate as a business, generating revenue and expenses.

Question 20

Revenue for reimbursement grants may be recognized before expenditures take place as long as the grant has been awarded.

Accepted Answer

The answer of Revenue for reimbursement grants may be recognized...

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