Question : 79.Investment income Endowments held by private colleges and classified as : 1255334

79.Investment income on Endowments held by private colleges and classified as permanently restricted net assets should be recorded as an increase in:

A)Unrestricted net assets.

B)Temporarily restricted net assets.

C)Permanently restricted net assets.

D)Any of the above, depending on the terms of the trust agreement.

80.Which of the following is true regarding the investments of private colleges in securities with determinable fair values?

A)Investments are to be carried at fair value; unrealized gains and losses are to be reported in the Statement of Activities along with realized gains and losses.

B)Investments are to be carried at fair value or amortized cost, depending upon whether the investments are in equity or debt securities.

C) Investments are to be carried at the lower of cost or market with unrealized losses reported in the Statement of Activities along with realized gains and losses.

D)None of the above.

81.According to NACUBO guidelines, what is the correct treatment for recognizing summer school revenues and expenses when a college’s fiscal year ends on June 30?

A)Recognize the entire amount of revenues and expenses in the year in which the summer term is predominantly conducted.

B)Recognize the entire amount of revenues and expenses in the year in which the summer term began.

C)Apportion the revenues and expenses to the two fiscal years, following accrual accounting practices similar to those employed by commercial enterprises.

D)Recognize expenses in the year in which they were billed and the expenses in the year in which they were incurred.

82.Which of the following would not be considered a split-interest agreement, according to the Not-for-Profit Guide?

A)Charitable remainder trusts.

B)Permanent income-sharing agreements.

C)Charitable gift annuities.

D)Pooled (life) income funds.

83.A private university received $18,000,000 in tuition and fees during an academic year.  Graduate assistantships, for which services were required, were awarded in the amount of $1,400,000.  Scholarships, for which no services were required, were awarded in the amount of $1,200,000.  The net tuition and fees that would be reported in the Statement of Activities would be:

A)$18,000,000.

B)$16,800,000.

C)$16,600,000.

D)$15,400,000.

84.A donor gave a gift of $40,000 cash to a private college in 2013 to support basic psychology research.  The funds were expended in 2014.  The private college would recognize the $40,000 as:

A)Revenue in 2013 increasing temporarily restricted net assets; recognize the expense in 2014, and reclassify the resources from temporarily restricted net assets to unrestricted net assets in 2014.

B)Deferred revenue in 2013 and as revenue in 2014, increasing temporarily restricted net assets.  The expense would be recognized also in 2014, and the resources would be reclassified from temporarily restricted net assets to unrestricted net assets in 2014.

C)   Deferred revenue in 2013 and as revenue in 2014, increasing unrestricted net assets.  The expense would be recognized in 2014.

D)Either (b) or (c), depending upon the policy of the private college.

85.Which of the following is true of a Statement of Cash Flows for a private college or university?

A) Either the direct or indirect method is acceptable.

B)Four categories are used:  Operating, Capital Related Financing, Non-capital Related Financing, and Investing.

C)Cash flows must be presented separately for Unrestricted, Temporarily Restricted, and Permanently Restricted categories.

D)All of the above are true.

86.A private college received a $2,000,000 gift from a donor.  The college’s governing board voted to use the $2,000,000 to establish an endowment, with the intent to keep the principal intact forever.  The income from the endowment was to be used to fund research in the biology department.  How should the college classify the $2,000,000 gift?

A)Unrestricted.

B)Temporarily restricted.

C)Permanently restricted.

D)Either temporarily or permanently restricted.

87.The NACUBO Financial Accounting and Reporting Manual treats estimates of uncollectible student accounts as:

A)Bad debt expense

B)A reduction in tuition and fee revenue

C)Either bad debt expense or a reduction in tuition and fee revenue as long as the policy is consistently applied

D)None of the above; colleges and universities must use the direct write off method

88.In 2014, a major drug company agreed to give a not-for-profit private college $1,700,000 to perform testing of a new drug.  An advance payment of $700,000 was received in 2014.  The college was to receive $4,000 per individual test.  In 2014, the college completed 100 tests.  How much revenue should the college report for 2014?

A)$     –  0  –  .

B)$   400,000.

C)$   700,000.

D)$1,700,000.

The following information applies to the next three questions:

A private foundation made a multi-year pledge to a private college on December 31, 2013, the last day of the fiscal year.  The pledge was to pay $12,000 per year each year for five years, beginning on December 31, 2014. The discount rate is 6%.  The present value of five payments of $12,000 is $50,548.  The present value of four payments of $12,000 is $41,581.  No purpose or plant restrictions were involved.

89.The private college would:

A)Record contribution revenue in the amount of $12,000 in each of the years 2014, 2015, 2014, 2015 and 2016.

B)  Record contribution revenue in the amount of $50,548 in 2013.

C)Record contribution revenue in the amount of $50,548 in 2014.

D)None of the above

90.The private college would:

A)Record interest revenue of $3,033 in 2013.

B)Record interest revenue of $3,033 in 2014.

C)Record contribution revenue of $3,033 in 2013.

D)  Record contribution revenue of $3,033 in 2014.

91.As of December 31, 2013, the contribution revenue would be classified as:

A)Unrestricted.

B)Temporarily restricted.

C)Permanently restricted

D)None of the above.