GOV-NON PROFIT

Question 1

• An unrestricted $50,000 pledge to be paid the following year
• A $25,000 cash gift restricted for scholarships
• A notice from a recent graduate that the college is named as a beneficiary of $10,000 in that graduate’s will

What amount of contribution revenue should Public College report in its statement of activities?

Answer 1

The unrestricted cash gift and the gift restricted for scholarships should be reported as contribution revenue currently. The naming of the college as a beneficiary in a will can be changed and is dependent upon future uncertainties. It should not be recognized at this time.

Question 2

If determining the actual historical cost of general infrastructure assets is not practical because of inadequate records, public institutions that report as special-purpose governments either engaged only in governmental activities or engaged in both governmental and business-type activities should report major general infrastructure assets using:

Answer 2

If determining the actual historical cost of general infrastructure assets is not practical because of inadequate records, public institutions reporting as special-purpose governments should report the estimated historical cost for major general infrastructure assets.

Question 3

How should state appropriations to a state university choosing to report as engaged only in business-type activities be reported in its statement of revenues, expenses, and changes in net position?

Answer 3

Revenues from state appropriations for other than capital-asset-related purposes are recorded as nonoperating revenues. Capital contributions and other financing sources are reported in other revenues, expenses, and transfers.

Question 4

Metro General is a municipally owned and operated hospital and a component unit of Metro City. Where should the information for Metro General be presented in the government-wide financial statements?

Answer 4

Data of discretely presented component units should be displayed in the government-wide statement of activities and statement of net position in columns to the right or after the primary government information. The focus of the government-wide financial statements should be on the primary government. Separate columns distinguish the primary government and its discretely presented component units. Discretely presented component units are not in substance part of the primary government. This contrasts with the presentation of blended component unit data, which is included within the primary government information because blended component units are, in substance, part of the primary government.

Question 5

Cash receipts from grants and subsidies to decrease operating deficits should be classified in which of the following sections of the statement of cash flows for governmental not-for-profit entities?

A.
Operating

B.
Noncapital financing

C.
Capital and related financing

D.
Investing

Answer 5

cash inflows from noncapital financing activities include cash receipts from grants or subsidies to finance operating deficits.