A not-for-profit university operates its college book-store as an auxiliary enterprise.During the year the store has revenues of $30 million and expenses of $27 million.In its statement of activities the university should report
A)Operating revenues of $3 million
B)Operating revenues of $30 million
C)Nonoperating revenues of $3 million
D)Nonoperating revenues of $30 million

Question

Quizplus · Accepted Answer

The book-store is operated as an auxiliary enterprise, which means it is a self-supporting activity of the university. Therefore, its revenues and expenses are reported within the university's operating activities. The total operating revenues of the book-store are $30 million, which should be reported in the statement of activities.

A Not-For-Profit University Operates Its College Book-Store as an Auxiliary