Question

Identifying the Appropriate GAAP. (LO15-1, LO15-3) Section A lists a number of reporting requirements for colleges and universities. Section B lists the standard-setting body(ies) imposing the reporting requirements. Section A 1. Patents are classified as capital assets. 2. Sidewalks are classified as land improvements. 3. Revenues and expenses must be categorized as operating and nonoperating. 4. Tuition and fees must be shown net of any estimated uncollectible amounts. 5. Expenses must be reported by program and support (management and general, and fund-raising) function classifications. 6. Statement of cash flows must be prepared using the direct method. 7. The purchase of a building is reported as an investing activity on the statement of cash flows. 8. The receipt of student deposits for housing is reported as a liability, Deposits Held in Custody for Others. 9. The cash from a debt issuance is reported in the capital and related financing activities section on the statement of cash flows. 10. The collection of historical first editions can be reported as a note rather than on the face of the financial statement provided certain conditions are met. Section B a. FASB standards b. GASB standards c. FASB and GASB standards Required Using the choices provided in Section B identify whether the reporting requirement listed in Section A is a FASB standard, a GASB standard, or both a FASB and a GASB standard.

Answer 1

Answer: Please refer to Explanation.

Explanation:

The Government Accounting Standards Board (GASB) is an NGO that oversees the formulation of the Generally Accepted Accounting Principles (GAAP).

The Financial Accounting Standards Board (FASB) does the same as well and is also an NGO.

The difference between the above 2 is that the whilst the GASB caters for Government organisations, the FASB caters for private Organizations.

Classifying the above we have,

1. Patents are classified as capital assets. GASB STANDARD.

2. Sidewalks are classified as land improvements. FASB STANDARD

3. Revenues and expenses must be categorized as operating and nonoperating. GASB STANDARD.

4. Tuition and fees must be shown net of any estimated uncollectible amounts. Both a GASB and an FASB STANDARD.

5. Expenses must be reported by program and support (management and general, and fund-raising) function classifications. FASB STANDARD.

6. Statement of cash flows must be prepared using the direct method. GASB STANDARD.

7. The purchase of a building is reported as an investing activity on the statement of cash flows. FASB STANDARD.

8. The receipt of student deposits for housing is reported as a liability, Deposits Held in Custody for Others. Both GASB and an FASB STANDARD.

9. The cash from a debt issuance is reported in the capital and related financing activities section on the statement of cash flows. GASB STANDARD.

10. The collection of historical first editions can be reported as a note rather than on the face of the financial statement provided certain conditions are met. Both a GASB and an FASB STANDARD.