Question 1

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

Accepted Answer

State appropriations are considered non operating revenues for higher education institutions and therefore should be reported as such in the Statement of Revenues, Expenses and Changes in Net Assets.

Question 2

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. Private colleges and universities are not subject to GASB requirements.

Question 3

GASB clearly defines the criteria when determining whether a government is general-purpose or special-purpose.

Accepted Answer

False

Question 4

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

Special purpose entities engaged in business-type activities should follow the same net asset classifications as the government-wide statement of net assets.

Question 5

Special-purpose governments generally provide a single or limited set of governmental services or programs.

Accepted Answer

Special-purpose governments are created to provide a specific, limited range of services or programs to their constituents, such as water and sewer districts or school districts.

Question 6

Special-purpose governmental entities that are engaged in a single governmental-type activity only are required to prepare only the statements required for governmental fund basis financial statements.

Accepted Answer

The answer of Special-purpose governmental entities that are engaged in...

Question 7

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

Accepted Answer

General state appropriations are typically used to fund capital expenditures or debt service, and are not directly related to the day-to-day operations of the institution. Therefore, they are considered nonoperating revenue.

Question 8

A Township could be either a general-purpose or a special purpose government.

Accepted Answer

A township can be either a general-purpose government, providing a range of services to its residents, or a special purpose government, serving a specific function such as fire protection or water management. It depends on the state and local laws governing townships.

Question 9

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, they are still required to prepare Management's Discussion and Analysis (MD&A) as per the Governmental Accounting Standards Board (GASB) Statement No. 34. The MD&A provides additional information about the financial statements, including any significant events or trends that could affect the entity's financial performance.

Question 10

A special-purpose government engaged in business-type activities financed in whole or part by fees charged to external parties are usually reported in enterprise funds.

Accepted Answer

Enterprise funds are used to account for activities that are financed in whole or part by fees charged to external parties, such as water or airport services. These funds are considered to be a type of proprietary fund, which means they are used to report business-type activities of the government.

Question 11

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

Accepted Answer

Revenue for reimbursement grants is recognized only when the related expenditures have been incurred, not when the grant is received.

Question 12

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

Accepted Answer

Special-purpose governments are those that provide a specific service or function, such as health care, education or cultural services. Therefore, governmental health care entities, public school systems and museums are all examples of special-purpose governments.

Question 13

Tuition waived for work-study and graduate assistants is deducted from student fee income 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 14

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

Accepted Answer

The answer of Public higher education institutions are allowed to...

Question 15

General-purpose governments are those that offer more than one type of basic governmental service, while special-purpose entities generally provide a limited or single, set of programs or services.

Accepted Answer

General-purpose governments are designed to provide a range of services, such as police and fire protection, education, parks and recreation, public works, and zoning regulations, while special-purpose entities are created to deliver a specific service, such as transit, water, sewer, or airports.

Question 16

The implementation guide for GASB Statement 34 provides a distinction by indicating that "general purpose governments are thought to be those that offer more than one type of basic governmental service.

Accepted Answer

The implementation guide for GASB Statement 34 does provide a distinction between general purpose governments and special purpose governments, with general purpose governments being those that offer more than one type of basic governmental service.

Question 17

According to GASB Statement 34, governmental activities are generally financed through taxes, intergovernmental revenues and other nonexchange revenues.

Accepted Answer

According to GASB Statement 34, governmental activities are financed through taxes, intergovernmental revenues and other nonexchange revenues.

Question 18

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 true. Public institutions of higher education are required to produce a Statement of Cash Flows, along with other financial statements, as part of their annual financial reporting requirements. The Statement of Cash Flows provides information about the cash inflows and outflows of the institution during the reporting period.

Question 19

Special-purpose governments that are engaged in both governmental and business-type activities are permitted to combine the fund and government-wide financial statements.

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.

Question 20

Special-purpose governmental entities that are engaged in a single business activity are not required to prepare government-wide financial statements, but may issue only enterprise fund statements.

Accepted Answer

This statement is true. Special-purpose governmental entities that are engaged in a single business activity, such as a water or sanitation district, are not required to prepare government-wide financial statements but may issue only enterprise fund statements in accordance with governmental accounting standards.

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