Question 1

Northern University received state appropriations as follows:
•Unrestricted general purposes $1,300,000
•Capital outlay,set aside for specific projects 1,700,000
What is the journal entry to record this event?

Accepted Answer

The unrestricted funds are recorded as "Cash and Cash Equivalents" and the restricted funds for capital projects are recorded as "Restricted Cash and Cash Equivalents." The corresponding revenues are recorded as "Nonoperating Revenues - State Appropriations" for general purposes and "Capital Appropriations" for the capital outlay.

Question 2

With respect to public colleges and universities,state appropriations for operating purposes are shown as:

Accepted Answer

State appropriations are reported as nonoperating revenue in the Statement of Revenues, Expenses, and Changes in Net Position for a public institution.

Question 3

The following data applies to the next two questions.
•Northern University has a fiscal year end of June 30.
•In June 2015, tuition and fees of $1,200,000 was assessed for the summer term that runs from June 1, 2015 through August 31, 2015. $1,200,000 was collected on June 1, 2015.
-What is the journal entry on June 1 for Northern?

Accepted Answer

The correct answer is A because the university received $1,200,000 in cash on June 1, 2015, for tuition and fees that will be earned over the three-month period from June 1, 2015, through August 31, 2015. Therefore, $400,000 of the cash received should be recognized as revenue in June 2015, and the remaining $800,000 should be deferred as unearned revenue.

Question 4

The following data applies to the next two questions.
•Northern University has a fiscal year end of June 30.
•In June 2015, tuition and fees of $1,200,000 was assessed for the summer term that runs from June 1, 2015 through August 31, 2015. $1,200,000 was collected on June 1, 2015.
-When is this revenue reportable on the financial statements for Northern?
2015 2016

Accepted Answer

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Question 5

What are the required parts of the annual financial reports for special-purpose governments engaged only in fiduciary-type activities?

Accepted Answer

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Question 6

What are the required parts of the annual financial report for special-purpose local governments engaged only in business-type activities?

Accepted Answer

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Question 7

The Implementation Guide for GASB Statement No.34 provides a distinction between general-purpose governments and special-purpose governments. Discuss the difference between the two.

Accepted Answer

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Question 8

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?

Accepted Answer

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Question 9

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

Accepted Answer

GASB requires that educational institutions follow accrual accounting for business-type activities and debt accounting. Therefore, the interest expense should be recorded on the accrual basis, including amortizing any premium or discount, if applicable. The principal should be recorded net of any premium or discount when the debt is issued. Option A is incorrect because recording only the debt service as an expenditure would result in understated interest expense. Option B is incorrect because it only records interest when it is due and payable, which does not provide an accurate picture of the institution's liabilities. Option C is incorrect because it does not amortize the premium or discount, resulting in an overstatement or understatement of interest expense over the life of the debt.

Question 10

Which of the following is true?

Accepted Answer

Tuition and fees charged are included in income. Tuition waivers associated with graduate assistantships and work-study programs are expensed.

Question 11

Which of the following groups would not be considered a component unit of a special-purpose government,for the purposes of applying GASB Statement 39: Determining Whether Certain Organizations Are Component Units?

Accepted Answer

Booster clubs are typically private organizations that support a specific sports team or activity and are not typically considered component units of a special-purpose government. The other options listed could potentially be considered component units depending on their relationship and financial reporting with the government entity.

Question 12

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.

Accepted Answer

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Question 13

The following information applies to the next three questions:
Tuition and fees for the Northern University was assessed at $22,000,000. Scholarship allowances, for which no services are required, were $1,600,000 and graduate assistantships, for which services are required, were $1,000,000.
-What is the journal entry to record the graduate assistantships?

Accepted Answer

The journal entry to record graduate assistantships should be a debit to Assistantships and Fellowships Expense for $1,000,000 and a credit to Accounts Receivable for $1,000,000.

Answer: A
 The graduate assistantships were already deducted from the tuition revenue and therefore, do not need a separate journal entry.

Answer: D
 This journal entry does not properly record the graduate assistantships. It records the scholarship allowances being deducted from operating revenue, but deferred revenue is not the appropriate account to credit for the assistantships. The correct account to credit is Accounts Receivable.

Question 14

Fees waived by the an educational institution in return for services to be provided by students are reported:

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Question 15

The following information applies to the next three questions:
Tuition and fees for the Northern University was assessed at $22,000,000. Scholarship allowances, for which no services are required, were $1,600,000 and graduate assistantships, for which services are required, were $1,000,000.
-What is the journal entry to record the scholarship allowances?

Accepted Answer

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Question 16

The following information applies to the next three questions:
Tuition and fees for the Northern University was assessed at $22,000,000. Scholarship allowances, for which no services are required, were $1,600,000 and graduate assistantships, for which services are required, were $1,000,000.
-What is the journal entry to record tuition revenue?

Accepted Answer

The total tuition and fees assessed, $22,000,000, is recorded as Operating Revenue-Student Tuition & Fees.

Note: Choice C is incorrect because it subtracts the scholarship allowances, which are not part of tuition revenue. Choice A is incorrect because it reflects a lower amount than the total assessed tuition and fees. Choice D is incorrect because it reflects a higher amount than the total assessed tuition and fees.

Question 17

According to the National Association of College and Business Officers,scholarship discounts and allowances paid by institutional funds,assuming that no services are provided by the recipients:

Accepted Answer

According to the National Association of College and Business Officers, scholarship discounts and allowances paid by institutional funds are reported as a reduction of revenue by directly reducing the revenue account or increasing a contra-revenue account. This means that they are deducted from the tuition revenue rather than classified as a separate revenue source.

Question 18

What are the criteria outlined in GASB Statement 39:
 Determining Whether Certain Organizations Are Component Units for requiring public college foundations to be reported as discretely presented components in the college's financial reports?

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Question 19

List three examples (types)of general-purpose state or local governments and three special-purpose local governments.

Accepted Answer

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Question 20

What is the difference between a component unit and a special purpose local government?

Accepted Answer

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

Northern University received state appropriations as follows: •Unrestricted general purposes $1,300,000 •Capital outlay,set aside for specific projects 1,700,000 What is the journal entry to record this event?