Question 1

GASB categorizes general state appropriation as nonoperating revenue for public colleges and universities.

Accepted Answer

GASB categorizes general state appropriation as nonoperating revenue for public colleges and universities.

Question 2

Which of the following statements is true of a special-purpose government?

Accepted Answer

Special-purpose governments that are engaged in a single governmental-type activity may combine the fund and government-wide financial statements. This is because such organizations do not have multiple activities to report, making it possible to combine the financial statements. Option A is incorrect because special-purpose governments that engage in more than one governmental-type activity are required to maintain separate fund and government-wide financial statements. Option B is incorrect because special-purpose governments that engage in only one business-type activity are not required to prepare government-wide financial statements. Option D is incorrect because GASB Statement 39 applies to all types of organizations, not just public educational institutions.

Question 3

Public colleges must report tuition income net of athletic scholarships.

Accepted Answer

Public colleges are required to report their tuition income net of athletic scholarships according to the National Center for Education Statistics.

Question 4

Which of the following would not be considered a special-purpose government for financial reporting purposes?

Accepted Answer

The other options (public school system, art museum, public hospital) are all examples of special-purpose governments that would need to prepare financial statements in accordance with governmental accounting standards. A county board of supervisors, however, is a general-purpose government and would follow standard accounting principles.

Question 5

Public colleges who waive fees for graduate assistants must report tuition income net of the fees waived.

Accepted Answer

The answer of Public colleges who waive fees for graduate...

Question 6

Which of the following is not an example of a special-purpose government?

Accepted Answer

All of the other options (B, C, D) are examples of special-purpose governments, as they specifically serve a certain function (managing tollways, operating libraries, providing fire protection) rather than general governance for a jurisdiction. Village government is typically a general-purpose government.

Question 7

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.

Accepted Answer

GASB Statement 33 requires that pledges receivable be recognized as assets and revenues when eligibility requirements are met, regardless of whether or not the pledge has been collected. This applies to public colleges and universities as well as other governmental entities.

Question 8

GASB categorizes general state appropriation as operating revenue for public colleges and universities.

Accepted Answer

GASB (Governmental Accounting Standards Board) typically categorizes general state appropriations as non-operating revenue for public colleges and universities.

Question 9

Public colleges must depreciate infrastructure and may not use the modified approach.

Accepted Answer

This statement is false. Public colleges have the option to use the modified approach for depreciating infrastructure.

Question 10

Public colleges who waive fees for graduate assistants must report tuition at the gross amount and expense the fees waived.

Accepted Answer

Public colleges who waive fees for graduate assistants are required to report the tuition at the gross amount and expense the fees waived. This is in accordance with Generally Accepted Accounting Principles (GAAP) and is necessary for accurate financial reporting.

Question 11

With respect to public colleges engaged in business-type activities,which of the following is not correct?

Accepted Answer

The answer of With respect to public colleges engaged in...

Question 12

Assume a government is determined to be a special-purpose government engaged in business-type activities only.Which of the following financial statements would be required?

Accepted Answer

A special-purpose government engaged in business-type activities only would prepare a Statement of Net Assets, Statement of Revenues, Expenses, and Changes in Net Assets, and a Statement of Cash Flows, as these are typical for enterprise funds.

Question 13

Which of the following is not required for a special-purpose local government engaged in only fiduciary type activities?

Accepted Answer

Special-purpose local governments engaged only in fiduciary activities are not required to prepare a Statement of Fiduciary Cash Flows.

Question 14

Assume a government is a special-purpose entity engaged in fiduciary activities only.Which of the following financial statements would be required?

Accepted Answer

Since the government is engaged in fiduciary activities only, it would only be required to present financial statements that relate to fiduciary activities. Therefore, the Statement of Fiduciary Net Assets and Statement of Changes in Fiduciary Net Assets would be the most appropriate statements to present as they provide information about the financial position and changes in the financial position of fiduciary activities. The other statements listed include information about non-fiduciary activities, which would not be applicable in this scenario.

Question 15

Public colleges and universities account for revenue bonds using the accrual method to account for interest and amortization of premiums and discounts.

Accepted Answer

Public colleges and universities are governmental entities and typically use the accrual method of accounting for their financial statements. Therefore, they would use the accrual method to account for revenue bonds, including the interest and amortization of premiums and discounts.

Question 16

Special-purpose governments that are engaged in both governmental and business-type activities or in more than one governmental activity are required to include all of the following in its financial statements except?

Accepted Answer

Special-purpose governments that are engaged in both governmental and business-type activities or in more than one governmental activity are required to include all of the following in its financial statements: Required supplementary information, fund basis financial statements, and government-wide financial statements.

Question 17

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

Accepted Answer

Special-purpose entities can be included as component units in a primary government's financial statements, and they may prepare combined statements if they engage in a single governmental activity.

Question 18

Which of the following is an example of a special-purpose government?

Accepted Answer

A park district is an example of a special-purpose government, as it only focuses on providing and maintaining parks and recreational facilities, rather than providing a general range of local government services like a city or village government.

Question 19

Assume a government is a special-purpose government engaged in only one governmental activity.Which financial statements would be required?

Accepted Answer

Special purpose governments that are engaged in only one governmental-type activity are permitted to combine the fund and government-wide financial statements. Otherwise, both the government-wide and fund statements would be required.

Question 20

Reimbursement grants require that the appropriate expenditure be made before the revenue can be recognized.

Accepted Answer

Reimbursement grants are funds given to an entity to cover certain expenses. Therefore, the revenue can only be recognized after the appropriate expenditure has been made and documented. This is because the grantor wants to ensure that the funds are being used for their intended purpose before releasing the funds.

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

GASB categorizes general state appropriation as nonoperating revenue for public colleges and universities.

Which of the following statements is true of a special-purpose government?

Public colleges must report tuition income net of athletic scholarships.

Which of the following would not be considered a special-purpose government for financial reporting purposes?

Public colleges who waive fees for graduate assistants must report tuition income net of the fees waived.

Which of the following is not an example of a special-purpose government?

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.

GASB categorizes general state appropriation as operating revenue for public colleges and universities.

Public colleges must depreciate infrastructure and may not use the modified approach.

Public colleges who waive fees for graduate assistants must report tuition at the gross amount and expense the fees waived.

With respect to public colleges engaged in business-type activities,which of the following is not correct?

Assume a government is determined to be a special-purpose government engaged in business-type activities only.Which of the following financial statements would be required?

Which of the following is not required for a special-purpose local government engaged in only fiduciary type activities?

Assume a government is a special-purpose entity engaged in fiduciary activities only.Which of the following financial statements would be required?

Public colleges and universities account for revenue bonds using the accrual method to account for interest and amortization of premiums and discounts.

Special-purpose governments that are engaged in both governmental and business-type activities or in more than one governmental activity are required to include all of the following in its financial statements except?

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

Which of the following is an example of a special-purpose government?

Assume a government is a special-purpose government engaged in only one governmental activity.Which financial statements would be required?

Reimbursement grants require that the appropriate expenditure be made before the revenue can be recognized.