20X8; $20,000 in contributions restricted for use in 20X9; and a $400,000 contribution
restricted for the establishment of a permanent endowment. It is anticipated that 10% of all
pledges except the endowment pledge will be uncollectible. Pledges receivable for 20X8
should be
A. $455,000.
B. $449,500.
C. $55,000.
D. $49,500.
22. Investment earnings of $1,250 were earned on restricted investments. The earnings are to be
used for various research projects during the current year. The earnings would be reported as
A. Unrestricted revenues.
B. Temporarily restricted revenues.
C. Permanently restricted revenues.
D. General interest revenue.
23. A nongovernment not-for-profit organization received a cash donation restricted for
construction of a new building. How should the donation be reported be reported in the
statement of cash flows?
A. Cash inflows from operating activities.
B. Cash inflows from financing activities.
C. Cash inflows from investing activities.
D. Cash inflows from capital and related financing activities.
24. A nongovernment not-for-profit organization received a cash donation of $100,000 restricted
for a specific operating purpose. Only $20,000 of the donation was spent during the current
year. How should the donation be reported be in the statement of activities?
A. Unrestricted revenues- $100,000.
B. Unrestricted revenues – $20,000.
C. Temporarily restricted revenues – $100,000.
D. Temporarily restricted revenues – $20,000.
25. A nongovernment not-for-profit organization received a cash donation of $100,000 restricted
for a specific operating purpose. Only $20,000 of expenses related to the specific operating
purpose was incurred during the current year. How should this activity be reported be in the
statement of activities?
A. Expenses in changes in unrestricted net assets, $20,000.
B. Expenses in changes in temporarily restricted net assets, $20,000.
C. Net assets released from restrictions in the permanently restricted assets, $20,000.
D. Expenses and net assets released from restriction in temporarily restricted net assets,
$20,000.
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26. Land valued at $100,000 was donated to a not-for-profit organization. The donation came
with no restrictions. The organization’s management decided to hold the land for resale and
use the proceeds to establish a reserve for future capital needs. Which of the following
journal entries would be made on the date of donation?
Debit Credit
A
.
Land Held for Resale
Restricted Contributions
$100,000
$100,000
B. Land Held for Resale
Capital Contributions
$100,000
$100,000
C. Land Held for Resale
Unrestricted Contributions
$100,000
$100,000
D
.
Land Held for Resale
Temporarily Restricted Contributions
$100,000
$100,000
27. Which of the following financial statements is only required for nongovernment voluntary
health and welfare organizations?
A. Statement of net assets.
B. Statement of activities.
C. Statement of cash flows.
D. Statement of functional expenses.
28. Which of the following financial statements is not required for all nongovernment not-for–
profit organizations?
A. Statement of net assets.
B. Statement of activities.
C. Statement of cash flows.
D. Statement of functional expenses.
29. A nongovernment not-for-profit organization statement of activities reports
A. Only changes in unrestricted net assets.
B. Only changes in unrestricted net assets that are revenues, expenses, gains, or losses.
C. Changes in both unrestricted and temporarily restricted net assets.
D. Changes in unrestricted, temporarily restricted, and permanently restricted net assets.
30. A nongovernment, not-for-profit environmental organization conducts a mailing about the
dangers of global warming. Included in the mailing is a request for donations. How should
this activity be reported be in the statement of activities?
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B. Program expense.
C. Fund-raising, unless certain criteria are met.
D. Allocated between fund-raising and program support.
31. A nongovernment, not-for-profit organization received $5,000,000 of unconditional pledges
during 2013 that had not been collected by year end. In its 2013 statement of activities, the
organization should recognize
A. No revenues, but should report receivables and deferred revenues in its balance sheet.
B. Unrestricted revenues of $5,000,000.
C. Temporarily restricted revenues of $5,000,000.
D. Permanently restricted revenues of $5,000,000.
32. Nongovernment not-for-profit organizations recognize revenues when
A. Pledges are measurable and available.
B. Unconditional pledges become due.
C. Unconditional pledges are made by donors, even if not yet collected.
D. Unconditional pledges are made by donors and qualifying costs have been incurred.
33. What costs may be deducted directly from revenues instead of being reported with the as
other expenses?
A. Direct costs of special fund raising events.
B. Expenses for benefits provided in exchange for membership dues.
C. Fund raising expenses.
D. Depreciation expense.
34. Nongovernment, not-for-profit organizations use the following classifications to report
expenses in the statement of activities
A. Unrestricted, temporarily restricted, and permanently restricted.
B. Operating and nonoperating.
C. Management and general and supporting services.
D. Mission critical, non-mission-critical, and discretionary.
35. Fund raising expenses are reported as
A. Nonoperating expenses.
B. Operating expenses.
C. Program expenses.
D. Supporting services expenses.
36. Which of the following is true for a nongovernment, not-for-profit organization?
A. Revenues and expenses may be reported in changes in unrestricted net assets.
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B. Revenues and expenses may be reported in changes in temporarily restricted net assets.
C. Revenues and net assets released from restrictions may be reported in changes in
permanently restricted net assets.
D. Expenses may be reported in changes in unrestricted net assets, changes in temporarily
restricted net assets, and changes in permanently restricted net assets.
1. Which of the following statements are true?
A. All colleges and universities report under the same GAAP guidelines.
B. Private colleges and universities must report using FASB guidance. Public colleges and
universities are permitted to follow that guidance or the guidance in the AICPA’s college
and university audit guide.
C. Private colleges and universities must report using the FASB guidance. Public colleges
and universities must report using GASB guidance.
D. Public colleges and universities must report as special purpose governments engaged
only in business-type activities.
2. Which measurement focus is used by governmental universities that report as a business-type
special purpose government?
A. Cash measurement focus.
B. Current financial resources measurement focus.
C. Economic resources measurement focus.
D. Accrual measurement focus.
3. Which fund used by colleges and universities is most like a local government’s general fund?
A. Unrestricted current fund.
B. Restricted current fund.
C. Unexpended plant fund.
D. Agency funds.
4. Governmental universities typically report as
A. General purpose governments.
B. Special purpose governments engaged in only business-type activities.
C. Special purpose governments engaged in only governmental activities.
D. Private sector entities.
5. Jim Catlett establishes a trust that is administered by Mansfield National Bank in the amount
of $750,000. Jim has promised that he will donate an additional $50,000 a year to the trust in
each of the next 5 years. The income from the trust will go to the state university. How much
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A. $1,000,000.
B. $750,000 plus the present value of the five $50,000 donations.
C. $750,000.
D. $0.
6. Which of the following statements are true regarding life income gifts?
A. Require the amount of the payment to the beneficiary to vary based on the earnings of the
trust.
B. Require a fixed-dollar payment to be made annually to a designated recipient.
C. Assets are recorded at historical cost when donated.
D. Life income gifts are no longer allowed by governmental colleges and universities.
7. A government university’s tuition and fees at the standard rates are $20 million. Scholarship
allowances of $1,500,000 are granted to students by the university and tuition waivers for
employees granted under the university’s tuition waiver policy are $100,000. Uncollectible
accounts are expected to equal $150,000. The amount of tuition and fees revenues that the
university should report is:
A. $18,250,000.
B. $18,350,000.
C. $18,500,000.
D. $20,000,000.
8. Charges for tuition for the current semester of a local college totaled $300,000. Academic
scholarships were awarded to students in the amount of $25,000 and tuition waivers were
given to children of employees in the amount of $10,000. The college should report
A. Revenues of $265,000 and Expenses of $35,000
B. Revenues of $275,000, net of $25,000 in allowances, and $10,000 in Expenses.
C. Revenues of $290,000, net of $10,000 in Allowances, and $25,000 in Expenses.
D. Revenues of $300,000 and Expenses of $35,000.
9. A college has a June 30 fiscal year end. Assume that tuition revenue for the summer session
that begins June 1, 20X8, and ends August 31, 20X8 totals $270,000. Tuition is billed and is
due at the beginning of the session term. How much revenue should be reported as of the
fiscal year ended June 30, 20X8?
A. $270,000.
B. $180,000.
C. $135,000.
D. $90,000.
10. Tuition revenues of government colleges and universities are reported
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B. Net of bad debts.
C. Net of scholarships and fellowships.
D. At the gross amount of the standard tuition and fees.
11. Government colleges and universities must recognize donations received with purpose
restrictions as
A. Deferred revenue until the restrictions are met.
B. Operating revenues.
C. Nonoperating revenues.
D. None of the above.
12. Purchase of capital assets by government colleges and universities engaged only in business
would be reported as
A. Expenditures.
B. Transfers to capital assets.
C. Reclassifications.
D. Increases in capital assets.
13. A public college was the recipient of an annuity gift. The elderly alumnus donated cash of
$110,000 and investments of $610,000 with the restriction that the college pays them a sum
of $50,000 per year for five years. If the annuity payable has been actuarially valued at
$305,000, the college should report revenues upon receipt of the gift in the amount of
A. $120,000.
B. $370,000.
C. $415,000.
D. $720,000.
14. Which type of gifts would normally not be reported by a government university?
A. Split-interest annuity gifts.
B. Split-interest life income gifts.
C. Trust held by others.
D. Endowment gifts.
15. If actuarial assumptions change such that the annuity payable is actually less than originally
recorded, the change should be reported
A. Immediately as a reduction in the annuity payable.
B. Immediately as an expense.
C. As an expense at the time the annuity obligations are fulfilled.
D. As a reduction of annuity payable at the time the annuity obligations are fulfilled.
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16. A government university that chooses to report as a business-type special purpose
government, purchases land for a planned dormitory by securing a ten year bank loan. The
entry to record the purchase and procurement of funding would include
A. A debit to assets.
B. A credit to fund balance.
C. A debit to expenditures.
D. A credit to other financing sources.
17. A wealthy alumnus donated land to be used for a new arts and sciences building at the local
state university. The land has a fair market value of $250,000. The donor purchased the land
ten years ago at a cost of $75,000. The entry to record the receipt of the donation would be
Debit Credit
A
.
Land
Capital Contributions
$250,000
$250,000
B. Land
Capital Contributions
$75,000
$75,000
C. Land
Special Item
$250,000
$250,000
D
.
Land
Special Item
$75,000
$75,000
18. Stock valued at $15,000 was donated to a college. The donor stipulated that the stock was to
be immediately sold and the proceeds used toward college’s capital campaign. The entry to
record the receipt of the gift would be
Debit Credit
A
.
Restricted Assets – Capital Campaign
Revenue
$15,000
$15,000
B. Restricted Assets – Capital Campaign
Deferred Revenue
$15,000
$15,000
C. Investments
Deferred Revenue
$15,000
$15,000
D
.
Investments
Special Item
$15,000
$15,000
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19. A university’s endowment fund has investments that were purchased for $400,000. As of the
end of the fiscal year, the fair value of the investments decreased by $33,000. What journal
entry is required to reflect the change in the fair market value of the investments?
Debit Credit
A
.
Loss on Endowment Investments
Endowment Investments
$33,000
$33,000
B. Interest Expense
Endowment Investments
$33,000
$33,000
C. Revenues-Investment Income
Endowment Investments
$33,000
$33,000
D
.
Interest Expense
Deferred Revenue
$33,000
$33,000
20. If a government university provides loans to qualifying students for tuition and fees, the
loans should be reported on the statement of cash flows as
A. Operating activities.
B. Noncapital financing activities.
C. Capital and related financing activities.
D. Investing activities.
21. A public university received a restricted donation from one of their trustees. The donation
was to be used to pay debt service costs for one year on the new athletic field. When
received, the donation will be reported on the statement of cash flows as
A. Operating activities.
B. Noncapital financing activities.
C. Capital and related financing activities.
D. Investing activities.
22. Which financial statements are required for government colleges and universities engaged
only in business-type activities?
A. Statement of net position, statement of revenues, expenditures, and other changes, and
statement of cash flows.
B. Statement of net position, statement of revenues, expenses, and changes in net position,
and statement of cash flows.
C. Statement of net position, statement of revenues, expenses, and changes in net position,
and statement of changes in net position.
D. Statement of net position, statement of activities, and statement of cash flows.
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23. The statement of net position of government colleges and universities engaged only in
business-type activities would not report which component of net position?
A. Unrestricted net position.
B. Temporarily restricted net position.
C. Net investment in capital assets.
D. Restricted net position.
24. The balance sheet of nongovernment, not-for-profit colleges and universities would report
which component of net assets?
A. Unrestricted net assets.
B. Restricted net position.
C. Net investment in capital assets.
D. Nonspendable net assets.
25. Government colleges and universities engaged only in business-type activities would report
state appropriation as
A. Operating revenues.
B. Special items.
C. Other financing sources.
D. Nonoperating revenues.
26. A state university assessed its students $2,000,000 of tuition and fees. However, only
$1,500,000 was expected to be collected because of an estimated uncollectible amount of
$25,000, scholarship allowances of $400,000, and tuition waivers to staff of $75,000. What
amount of net tuition and fees revenue should be reported in the statement of revenues,
expenses and changes in net position?
A. $1,500,000.
B. $1,575,000.
C. $1,600,000.
D. $2,000,000.
27. A government university received a cash donation $1,000,000 to create an endowment. The
income of the endowment can be used to support any activity of the university. In the balance
sheet, the $1,000,000 endowment should be included in which component of net position?
A. Unrestricted net position.
B. Restricted — nonexpendable net position.
C. Nonspendable net position.
D. Permanently restricted net position.
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28. Chase Foundation establishes a $1,000,000 trust for a government university. The local bank
is appointed as trustee of the fund. The income of the trust can be used to support any activity
of the university. In the university’s statement of net position, the $1,000,000 trust should be
included in which component of net position?
A. Not reported.
B. Unrestricted net position.
C. Restricted — nonexpendable net position.
D. Permanently restricted net position.
29. The statement of cash flows of government colleges and universities engaged only in
business-type activities would report all of the following sections except:
A. Investing.
B. Noncapital financing.
C. Capital and related financing.
D. Financing.
30. A state college receives an annuity gift of $200,000 from an individual. The individual is to
receive $18,000 a year for 10 years. The present value of the payments to the individual is
$150,000. How much revenues should the college report from this transaction?
A. $0.
B. $20,000.
C. $50,000.
D. $200,000.
31. Which of the following classifications of net position likely would be found on the statement
of net position of a governmental university that reports as a business-type activity?
A. Temporarily restricted net position.
B. Unrestricted net position.
C. Permanently restricted net position.
D. Nonspendable net position.
32. A government university collected unrestricted student fees of $200,000 and fees restricted
for technology of $400,000 in the current academic year.
A. The full $600,000 should be reported as revenues for the academic year.
B. $200,000 should be reported as revenues and $400,000 should be reported as unearned
revenues
C. $200,000 should be reported as revenues and $200,000 as deferred revenues.
D. $400,000 should be reported as unearned revenues and $200,000 as deferred revenues.
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