A private university received $280,000 from student tuition and fees for the year 2009 summer session. The session began on June 20, 2009, and ended on July 30, 2009. The university's fiscal year end is June 30. According to the AICPA College and University Audit Guide, how should the university report the $280,000 of receipts in its financial statements for the year ended June 30, 2009?

C. Deferred revenue of $280,000.

A. Current revenue of $280,000.

B. Current revenue of $70,000 and deferred revenue of $210,000.

D. Restricted current revenue of $280,000.

Assume that a private university collects tuition and fees at the beginning of summer school, in which two weeks are offered in the first fiscal year and the remaining six weeks are offered in the second fiscal year. According to the approach recommended by the National Association of College and University Business Officers (NACUBO), the university would:

D. recognize revenue in the first fiscal period for two-eighths of the tuition and fees and record six-eighths of the collections as a deferred revenue.

A. record the collections as a debit to Cash and a credit to Deferred Revenue for the entire amount of the collections.

B. record the collections as a debit to Cash and a credit to Restricted current revenue for the entire amount of the collections.

C. account for the entire tuition and fees as revenue in the first fiscal period.

A private university offers graduate assistantships to qualified students each year. In exchange for the waiver of tuition, graduate assistants are required to assist faculty members with research and other activities. Assume a graduate assistant received a $4,000 tuition waiver for the current academic year. Based on these facts, the university should record:

tuition revenues of $4,000 and expenditures of $4,000.

tuition revenues of $0 and expenditures of $0.

tuition revenues of $4,000 and expenditures of $0.

tuition revenues of $4,000 and a reduction of tuition revenues of $4,000.

A private college received an offer from a CPA who is an alumnus to teach a one-semester advanced accounting course at no cost. FASB 116 prescribes that this contribution of service:

be recorded as a revenue with an equivalent amount recorded as an expenditure.

need only be disclosed in the footnotes to the financial statements.

be recorded as an asset with an equivalent amount recorded in the unrestricted fund balance.

need not be recorded if the service is for a period less than one academic year.

In accordance with FASB 117, contributions from donors which are to be permanently invested should be disclosed on the statement of activities of a private university as an increase in:

Permanently restricted fund balance.

For the year ended June 30, 2009, a private college received contributions from alumni which were restricted for faculty research stipends to be awarded during the next fiscal year. For the year ended June 30, 2009, these contributions should be disclosed on the statement of activities of the private college as an increase in:

temporarily restricted net assets.

the fund balance of the restricted current fund.

temporarily restricted fund balance.

Unrestricted gifts and endowment income of a private university are reported as

C. unrestricted revenues on the statement of activities.

A. increases in the unrestricted current fund balance on the statement of changes in fund balances.

B. unrestricted revenues on the statement of current funds revenues, expenditures, and other changes.

D. increases in the unrestricted current fund balance on the statement of activities.

One of the major objectives of FASB 117 is to

D. bring about greater uniformity in the financial statements of all private, not-for-profit organizations.

A. emphasize the different fund structures that currently exist for all private, nonprofit organizations.

B. change the reporting for governmental organizations so that their reporting is comparable to that of private, nonprofit organizations.

C. report combined financial statements, instead of individual fund financial statements, for all private, nonprofit organizations.

A not-for-profit private college in Virginia created a separate foundation responsible for obtaining financial support from alumni and others. Foundation assets are used for the benefit of the college. Donations made to the foundation and subsequently transferred to the college should be:

recognized as revenues by the foundation when received and as expenses by the foundation when transferred.

recognized as revenues by the foundation when received, and as revenues of the college when transferred.

recognized both as a change in its interest in the foundation and as revenues by the college when the donation is received by the foundation.

recognized as an increase in net assets of the foundation and as revenues of the college when the donation is received by the college.

guides accounting for contributions.

establishes financial display requirements.

establishes the accounting for investments.

A private, not-for-profit hospital received a cash contribution of $100,000 from Samantha Hicks on November 14, 2008. Ms. Hicks specified the money be used to acquire equipment. On December 31, 2008, the hospital had not expended any of Ms. Hicks' contribution. On the statement of changes in net assets for the year ended December 31, 2008, the hospital should report the contribution as a $100,000 increase in:

temporarily restricted net assets.

Unrestricted current funds of a private university designated by the governing board for a specific future purpose should be reported as part of:

temporarily restricted net assets.

A private, not-for-profit geographic society received cash contributions which were restricted by the donors for the acquisition of fixed assets. In which section of the statement of cash flows would these cash contributions be reported?

Capital and related financing activities

On the statement of activities for a private, not-for-profit literary society, expenses decrease which of the following classes of net assets?

I. temporarily restricted net assets

Bridger Hospital, which is operated by a religious organization, provides charity care for the indigent living in the region served by the hospital. How should Bridger report the amount of its charity care on its financial statements?

In the notes to the financial statements only.

As unrestricted revenues on the statement of operations.

As net patient service revenue and as an expense, equal to the net patient service revenue, on the statement of operations.

As temporarily restricted revenue on the statement of operations.

The governing board of Samaritan Hospital, which is operated by a religious organization, designated $500,000 of cash for future expansion of the hospital. On the hospital's balance sheet, the cash designated for future plant expansion would be disclosed in which of the following classes of net assets?

Temporarily restricted net assets

Plant replacement and expansion.

Good Care Hospital, which is operated by a religious organization, received contributions of $1,000,000 from donors who stipulated that the cash be used to construct an addition to the hospital. As of the balance sheet date, none of the contributions had been expended for construction. On the hospital's balance sheet, the cash contributions would be disclosed in which of the following classes of net assets?

Temporarily restricted net assets

A private, not-for-profit hospital received contributions of $50,000 from donors on June 15, 2009. The donors stipulated that their contributions be used to purchase equipment for the hospital. As of June 30, 2009, the end of the hospital's fiscal year, $12,000 of the contributions had been spent on equipment acquisitions. In the hospital's general fund, what account would be credited to recognize the release of the restrictions on the temporarily restricted contributions used to acquire equipment?

Net assets released from equipment acquisition restriction

Revenue released from equipment acquisition restriction

Unrestricted net assets released from equipment acquisition restriction

On June 30, 2009, a voluntary health and welfare organization received pledges from donors amounting to $50,000. The donors did not place any time or use restrictions on the amount pledged. It was estimated that 10 percent of the pledges would not be collected. How should the voluntary health and welfare organization report these pledges on its financial statements prepared at the end of its fiscal year, June 30, 2009?

As contribution revenue-unrestricted for $45,000.

As contribution revenue-unrestricted for $50,000.

As fund balance-unrestricted for $50,000.

All restricted funds of private, not-for-profit hospitals account for resources:

whose use is restricted by the donor.

received and expended in the hospital's primary health care mission.

that are only temporarily restricted.

received or pledged by donors for use in future periods.

A donor agrees to contribute $5,000 per year at the end of each of the next five years to a voluntary health and welfare organization. The donor did not place any use restrictions on the amount pledged. The stream of the payments is discounted at 6 percent. The first payment of $5,000 is received at the end of the first year. The present value factor for a five-payment annuity due on June 30, 2009, at 6 percent is 4.2124. Based on the preceding information, the journal entry to recognize present value at the time the pledge is received includes:

a debit to Pledges Receivable—Temporarily Restricted for $21,062.

a credit to Pledges Receivable—Temporarily Restricted for $25,000.

a debit to Contributions—Temporarily Restricted for $21,062.

a credit to Contributions—Temporarily Restricted for $25,000.

A voluntary health and welfare organization received a $300,000 contribution on April 15, 2009, from a donor who stipulated the donation be invested permanently in stocks and bonds. The donor further stipulated earnings from the investments be spent according to the wishes of the governing board of the voluntary health and welfare organization. Earnings from the investments for the year ended June 30, 2009, amounted to $6,000. How would the voluntary health and welfare organization report this information for the year ended June 30, 2009?

Increase in permanently restricted net assets of $300,000, and in unrestricted net assets of $6,000.

Increase in permanently restricted net assets of $306,000.

Increase in permanently restricted net assets of $300,000, and in temporarily restricted net assets of $6,000.

Increase in permanently restricted net assets of $300,000, and in board-designated net assets of $6,000.

A private, not-for-profit hospital expended $35,000 of temporarily restricted assets to acquire equipment. What account should be debited in the hospital's plant replacement and expansion fund as a result of the acquisition of the equipment?

Net Assets Released—Plant Acquisition.

Fund balance Released—Plant Acquisition.

Contribution Revenue Released—Plant Acquisition.

In 2009, a private not-for-profit hospital received a $200,000 cash contribution to its endowment fund. During the year, hospital administration invested $150,000 of the funds. Which of the following statements regarding the effect of these transactions on the preparation of the hospital's statement of cash flow is true?

The $200,000 contribution will appear in the financing activities section of the cash flow statement as a cash inflow.

The $200,000 contribution will appear in the investing activities section of the cash flow statement as a cash inflow.

The $150,000 investment will appear in the investing activities section of the cash flow statement as a cash inflow.

The $150,000 contribution will appear in the financing activities section of the cash flow statement as a cash inflow.

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C. Either I or II

D. Neither I nor II

According to Statement of Financial Accounting Standards 117, the statement of financial position of a private university should report the excess of the university's assets over its liabilities as:

A. fund balance.

B. unrestricted and restricted fund balance.

C. retained earnings.

D. unrestricted, temporarily restricted, and permanently restricted net assets.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which of the following is an example of volunteer services received by a not-for-profit entity that should be recognized as revenue? I. Services requiring specialized skills, provided by individuals with those skills, that otherwise would have to be purchased. II. Services of lay faculty at a private university operated by a religious order. III. Services that create or enhance non-financial assets, regardless of whether or not they require specialized skills.

A. I only

B. I and III only

C. II and III only

D. I, II, and III

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Which rule-making body is currently setting standards of financial reporting for private not-for-profit universities and for public (governmental) universities?

Net assets restricted as to time or purpose should be classified as:
I: Temporarily Restricted
II: Permanently Restriced

A not-for-profit organization received a donation temporarily restricted as to use. The donated amount was later spent in accordance with the restriction. In which category(ies) of net assets should the related revenues and expenses be recognized?

According to FASB 93, "Recognition of Depreciation by Not-For-Profit (NFP) Entities," NFP entities should recognize depreciation: I. on all long-lived tangible assets. II. on all long-lived intangible assets.

The term "restricted" as used in university accounting refers to a constraint on the use of funds which has been: I. internally imposed. II. externally imposed.

According to Statement of Financial Accounting Standards 117, the statement of financial position of a private university should report the excess of the university's assets over its liabilities as:

In a university, class cancellation refunds of tuition and fees should be recorded as: I. a reduction of revenue from tuition and fees. II. a reduction of accounts receivable.

Which of the following recognition and measurement bases best summarizes the usual treatment of current contributions to private not-for-profit entities in accordance with FASB 116?

According to FASB 124, not-for-profit entities should report investments in the financial statements at: I. fair market value. II. lower of cost or market.

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Which rule-making body is currently setting standards of financial reporting for private not-for-profit universities and for public (governmental) universities?

Net assets restricted as to time or purpose should be classified as:I: Temporarily RestrictedII: Permanently Restriced

A not-for-profit organization received a donation temporarily restricted as to use. The donated amount was later spent in accordance with the restriction. In which category(ies) of net assets should the related revenues and expenses be recognized?

According to FASB 93, "Recognition of Depreciation by Not-For-Profit (NFP) Entities," NFP entities should recognize depreciation: I. on all long-lived tangible assets. II. on all long-lived intangible assets.

The term "restricted" as used in university accounting refers to a constraint on the use of funds which has been: I. internally imposed. II. externally imposed.

According to Statement of Financial Accounting Standards 117, the statement of financial position of a private university should report the excess of the university's assets over its liabilities as:

In a university, class cancellation refunds of tuition and fees should be recorded as: I. a reduction of revenue from tuition and fees. II. a reduction of accounts receivable.

Which of the following recognition and measurement bases best summarizes the usual treatment of current contributions to private not-for-profit entities in accordance with FASB 116?

According to FASB 124, not-for-profit entities should report investments in the financial statements at: I. fair market value. II. lower of cost or market.

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Net assets restricted as to time or purpose should be classified as:
I: Temporarily Restricted
II: Permanently Restriced