Question

Which of the following is not true regarding the Statement of Revenues, Expenses, and Changes in Net Position for a public college? Multiple Choice
a. Auxiliary enterprise activities represent revenues and expenses related to units of the college that provide services to students on a user fee basis and is classified as operating revenue.
b. Reimbursement type grants are recorded as operating revenue when qualifying expenses are made.
c. Student financial aid is a revenue contra account.
d. All of the above are true.

Answer 1

Answer:

d. All of the above are true.

Explanation:

The objectives of colleges and universities differ from those of commercial enterprises for which profit is the primary motive in that colleges and universities seek to provide educational services within the existing levels of revenues available, although a slight level of excess revenue may be desired by some governing boards. A balanced budget where expenditures remain within available revenues is always expected of a financially responsible college or university. A major reduction in the net assets of an institution should be cause for concern and may be a sign of financial instability.