Question

A not-for-profit university operates its college book-store as an auxiliary enterprise. During the year the store has revenues of $30 million and expenses of $27 million. In its statement of activities the university should report
A. Operating revenues of $3 million
B. Operating revenues of $30 million
C. Nonoperating revenues of $3 million
D. Nonoperating revenues of $30 million

Answer 1

Answer:

The correct answer is option B.

Explanation:

The university mentioned here runs a college book store.

The revenues of the store in the year are $30 million.

The expenses incurred by the store in the year is $27 million.

In the statement of activities, the operating revenue should be reported as $30 million.

The profit of the book store will be $3 million.

So, option B is the correct answer.