Question 1

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

The GASB requires special-purpose governments engaged in business-type activities to prepare the same financial statements as private-sector businesses.

Question 2

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

Accepted Answer

Special-purpose entities can include park districts, school districts, and public colleges and universities which are governmental units. Also, special-purpose entities may have more limited reporting requirements than general-purpose entities depending on their purpose and ownership structure.

Question 3

Which of the following is true regarding the Statement of Revenues,Expenses,and Changes in Net Assets for a public college?

Accepted Answer

Public colleges report tuition revenues net of tuition waivers only when those waivers do not require service from the recipient, as service requirements would make them akin to compensation. Depreciation expense is recognized, so option B is incorrect.

Question 4

Which of the following is true regarding the Statement of Cash Flows for a public college?

Accepted Answer

A reconciliation is required, reconciling operating income in the Statement of Revenues, Expenses, and Changes in Net Assets to the cash flows provided (used) by operating activities.

Question 5

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

Accepted Answer

Government-wide statements provide information about the government as a whole, while governmental fund statements provide information about the individual governmental funds. In this case, since the government is engaged in only one governmental activity, the government-wide statements and the governmental fund statements would be combined into a single set of financial statements.

Question 6

A public college had tuition and fees for the year ended June 30,2012 in the amount of $45,000,000.Scholarships,for which no services were required,amounted to $2,300,000.Graduate assistantships,for which services were required,amounted to $2,500,000.The amount to be reported by the college for net tuition and fee revenue would be:

Accepted Answer

Net tuition and fee revenue is calculated by subtracting scholarships for which no services are required from the total tuition and fees. Therefore, $45,000,000 - $2,300,000 = $42,700,000. Graduate assistantships are not subtracted because they require services.

Question 7

Which of the following is true regarding the Statement of Cash Flows for a public college?

Accepted Answer

Cash received for interest is reported as an increase in cash flows from operating activities, and cash paid for interest is reported as a decrease in cash flows from operating activities.

Question 8

Which of the following is true regarding the Statement of Revenues,Expenses and Changes in Net Assets for a public college reporting as a special purpose entity engaged in business type activities only?

Accepted Answer

Public colleges reporting as special purpose entities engaged in business-type activities use full accrual accounting, and grants are typically treated as operating revenue while contributions are considered non-operating revenue.

Question 9

Which of the following groups would probably 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

The high school band booster club is not typically a component unit of a special-purpose government since it is a separate entity that supports a specific program within the government rather than the government itself. The other options are more likely to be considered component units because they are organizations that either provide direct support to the government or are controlled by the government.

Question 10

Which of the following is true regarding the Statement of Revenues,Expenses,and Changes in Net Assets for a public college?

Accepted Answer

The answer of Which of the following is true regarding...

Question 11

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 only engaged in fiduciary activities, it would only be required to prepare financial statements specific to those activities. The Statement of Fiduciary Net Assets and Statement of Changes in Fiduciary Net Assets would provide relevant information about the government's fiduciary funds, while the other options include statements that are not necessary for this type of entity.

Question 12

A public college had tuition and fees of $21,000,000.Scholarships,for which no services were required,amounted to $2,500,000.Graduate assistantships,for which services were required,amounted to $1,600,000.The amount to be reported by the public college as net tuition and fees would be:

Accepted Answer

The net tuition and fees can be calculated by subtracting the scholarships and graduate assistantships from the total tuition and fees. 
Net tuition and fees = Total tuition and fees - Scholarships - Graduate assistantships
Net tuition and fees = $21,000,000 - $2,500,000 - $1,600,000
Net tuition and fees = $16,900,000
Therefore, the correct answer is A) $18,500,000.

Question 13

Which of the following is true regarding the Statement of Revenues,Expenses,and Changes in Net Assets for a public (government-owned)college?

Accepted Answer

The Statement of Revenues, Expenses, and Changes in Net Assets for a public (government-owned) college typically uses the full accrual basis of accounting to determine the net increase or decrease in net assets. However, auxiliary enterprise activities, such as residence halls, dining services, and bookstores, are accounted for using the similar accounting practices as in commercial organizations because they represent revenue-generating activities that must be self-supporting over the long-term. Therefore, option B is correct, and option A is incorrect. Option C is incorrect because only option B is true. Option D is incorrect because option B is true.

Question 14

Which of the following would be true regarding the Statement of Net Assets for a public college reporting as a special purpose entity engaged in business type activities only?

Accepted Answer

The answer of Which of the following would be true...

Question 15

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

Accepted Answer

Special-purpose entities that are controlled by a primary government and that are required to be included in the primary government's financial statements are known as component units. Therefore, A is true. However, B is not true because special-purpose entities must prepare separate government-wide and fund financial statements.

Question 16

Public colleges and universities that choose to report as special-purpose entities engaged only in business-type activities would have which of the following financial statements?

Accepted Answer

The answer of Public colleges and universities that choose to...

Question 17

Which of the following is true regarding the Statement of Cash Flows for a public college?

Accepted Answer

The answer of Which of the following is true regarding...

Question 18

Which of the following statements is true regarding accounting and financial reporting for public colleges and universities?

Accepted Answer

Public colleges and universities are considered special-purpose entities engaged in both governmental and business-type activities, and are required to use the Governmental Accounting Standards Board (GASB) standards for financial reporting. They cannot choose to report using FASB standards, as those are intended for private entities.

Question 19

Public colleges and universities may choose to report as:

Accepted Answer

Public colleges and universities may have both governmental and business-type activities, and therefore may choose to report as special-purpose entities engaged in either or both types of activities. The reporting choice would depend on the nature of their specific operations.

Question 20

Special purpose local governments engaged only in fiduciary-type activities are required to prepare all of the following except:

Accepted Answer

Special purpose local governments engaged only in fiduciary-type activities are not required to prepare a Statement of Cash Flows, as this statement is typically associated with proprietary funds, not fiduciary funds.

Quiz 9: Advanced Topics for State and Local Governments

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 true regarding financial reporting of special-purpose entities?

Which of the following is true regarding the Statement of Revenues,Expenses,and Changes in Net Assets for a public college?

Which of the following is true regarding the Statement of Cash Flows for a public college?

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

Which of the following is true regarding the Statement of Cash Flows for a public college?

Which of the following is true regarding the Statement of Revenues,Expenses and Changes in Net Assets for a public college reporting as a special purpose entity engaged in business type activities only?

Which of the following groups would probably 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?

Which of the following is true regarding the Statement of Revenues,Expenses,and Changes in Net Assets for a public college?

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

A public college had tuition and fees of $21,000,000.Scholarships,for which no services were required,amounted to $2,500,000.Graduate assistantships,for which services were required,amounted to $1,600,000.The amount to be reported by the public college as net tuition and fees would be:

Which of the following is true regarding the Statement of Revenues,Expenses,and Changes in Net Assets for a public (government-owned) college?

Which of the following would be true regarding the Statement of Net Assets for a public college reporting as a special purpose entity engaged in business type activities only?

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

Public colleges and universities that choose to report as special-purpose entities engaged only in business-type activities would have which of the following financial statements?

Which of the following is true regarding the Statement of Cash Flows for a public college?

Which of the following statements is true regarding accounting and financial reporting for public colleges and universities?

Public colleges and universities may choose to report as:

Special purpose local governments engaged only in fiduciary-type activities are required to prepare all of the following except: