A university needs to know the cost of delivering each of its programs. Which basis would be the most appropriate for the university to use on its statement of operations?

Question

Quizplus · Accepted Answer

The expense basis is the most appropriate basis for the university to use on its statement of operations because it shows the actual costs incurred in delivering its programs. This includes direct costs such as salaries, benefits, and materials, as well as indirect costs such as facilities and administrative expenses. The disbursement basis only shows the actual cash payments made, which may not reflect the true costs of the programs. The expenditure basis is similar to the expense basis but includes all expenditures made, even if they have not been paid yet. The cash basis only shows the cash inflows and outflows, which may not be fully indicative of the cost of delivering the programs.

A University Needs to Know the Cost of Delivering Each