31) A private college would report which of the following assets differently than a public college?
A) Land.
B) Intangible assets.
C) Collections.
D) Equipment.
32) Cactus College, a small private college, received a research grant from NACUBO to study
whether service efforts and accomplishments measures improve institutional performance. In
accordance with FASB standards the grant would be reported as an increase in:
A) Net assets without donor restrictions.
B) Net assets with donor restrictions.
C) Deferred revenue.
D) Board-designated net assets.
33) Which of the following receipts may properly be accounted for as an increase in net assets
without donor restrictions by a private college?
A) Student tuition and fees.
B) Gift from an alumnus for a new college of business building.
C) Federal grant for genetic research.
D) Acceptance of assets, the income from which will be paid to the donor.
34) It would not make economic sense for a university to accept a split-interest agreement in which
a fixed annuity is payable to the donor if:
A) The donor has attached conditions to the gift.
B) The university has no immediate need for the assets.
C) The sum of future annuity payments plus interest thereon exceeds the fair market value of the
assets.
D) The present value of the future annuity payments and other liabilities exceed the fair market
value of the assets.
35) The FASB requires that private colleges and universities prepare which of the following
financial statements?
A) A statement of net position.
B) A statement of net changes in financial position.
C) A statement of activities.
D) The FASB requires private colleges and universities to prepare all of the above statements.
36) Which of the following items would not affect the amounts reported in the Revenues and Gains
section of the statement of activities for a private college or university?
A) Student tuition and fees.
B) Tuition and fees discounts and allowances.
C) Net assets released from restriction.
D) Deferred revenues.
37) A college has collected returnable dormitory room deposits from students. How would these
deposits be reported by the college?
A) A current liability.
B) Unrestricted revenue.
C) Restricted revenue.
D) A long-term liability.
38) Which of the following is required as part of a complete set of financial statements for a public
college or university engaged only in business-type activities?
A) Statement of changes in operations.
B) Statement of revenues, expenses, and changes in net position.
C) Statement of activities.
D) Statement of functional expenses.
39) Colleges and universities often make loans to students. How would these loans be reported on
the financial statements?
A) An expense.
B) A receivable.
C) A liability.
D) An investment.
40) Which of the following statements is required for both a private university and a
governmentally owned public university engaged only in business-type activities?
A) Statement of cash flows.
B) Statement of net position.
C) Statement of activities.
D) Statement of revenues, expenses, and changes in net position.
41) Tuition scholarships for which there is no intention of performance from the student should be
classified by a private university as
A) Reductions of gross revenue to arrive at net revenue.
B) Not recognized in the financial statement.
C) Increases in expenditures.
D) Reductions of gross revenue or as expenses provided they are consistently classified in the
same manner from year to year.
42) Culver City College, a public college, has a 10-week summer session that starts on June 25,
2020, so that one week is held during FY 2020 and the other nine weeks meet during FY 2021.
Tuition and fees in the amount of $1,000,000 were collected from students for classes to be
conducted in this session. What amount should Culver City College recognize as unrestricted
revenue in each of the years ended (FYE) June 30, 2020 and June 30, 2021?
FYE 2020
FYE 2021
A.
$
100,000
$
900,000
B.
$
0
$
1,000,000
C.
$
1,000,000
$
0
D.
$
500,000
$
500,000
A) Choice A.
B) Choice B.
C) Choice C.
D) Choice D.
43) An alumnus donates securities to a private college and stipulates that the principal be held in
perpetuity and income from the securities be used for faculty travel. Dividends received from the
securities should be recognized as increases in:
A) Endowments.
B) Net assets without donor restrictions.
C) Deferred revenue.
D) Net assets with donor restrictions.
44) During the years ended June 30, 2020 and 2021, Jackson University, a private university,
conducted a cancer research project financed by a $1,000,000 gift from an alumnus. The entire
amount was pledged by the donor on July 10, 2019. The gift was restricted to the financing of this
particular research project. During the two-year research period, Jackson’s gift receipts from the
alumnus and research expenses related to the research project were as follows for each fiscal year
(FY):
FY 2020
FY 2021
Gift receipts
$
200,000
$
800,000
Cancer research expenses
$
100,000
$
900,000
What amount of net assets was released from restriction in 2020?
A) $200,000.
B) $100,000.
C) $1,000,000.
D) $0.
45) During the years ended June 30, 2020 and 2021, Jackson University, a private university,
conducted a cancer research project financed by a $1,000,000 gift from an alumnus. The entire
amount was pledged by the donor on July 10, 2019. The gift was restricted to the financing of this
particular research project. During the two-year research period, Jackson’s gift receipts from the
alumnus and research expenses related to the research project were as follows for each fiscal year
(FY):
FY 2020
FY 2021
Gift receipts
$
200,000
$
800,000
Cancer research expenses
$
100,000
$
900,000
How much had net assets with donor restrictions increased as of the end of FY 2021?
A) $1,000,000.
B) $100,000.
C) $(100,000).
D) $0.
46) How would estimated uncollectible tuition and fees be reported on the financial statements of a
university?
I. It would be reported as part of net revenue by a public university.
II. It would be reported as an operating expense by a public university.
III. It would be reported as an operating expense by a private university.
A) I only.
B) II only.
C) III only.
D) Both I and III are correct methods of reporting estimated uncollectible tuition and fees.
47) During the year ended June 30, 2020, Hopkins College, a private college, received a federal
government grant of $800,000 for research on the role of music in improving math skills for
students. Expenses that were not capital in nature for this research amounted to $100,000 during
the same year. Under FASB standards, which of the following best represents how Hopkins
College would report this nonexchange transaction in the net assets section for the year ended June
30, 2020?
Without Donor Restrictions
With Donor Restrictions
A.
$
0
$
800,000
B.
$
0
$
700,000
C.
$
100,000
$
700,000
D.
$
800,000
$
0
A) Choice A.
B) Choice B
C) Choice C.
D) Choice D.
48) Which of the following is not a classification of revenues for a college or university as
recommended by the National Association of College and University Business Officers
(NACUBO)?
A) Sporting events.
B) State appropriations.
C) Investment income.
D) Contributions.
49) State educational appropriations received by a public university are classified as which of the
following on the statement of revenues, expenses, and changes in net position?
A) Nonoperating revenue.
B) Operating revenue.
C) Other financing source.
D) Increase in unrestricted net position.
50) Which of the following is a typical classification of a functional expense in a college or
university?
A) Academic wages and benefits.
B) Student support.
C) Institutional support.
D) Depreciation.