Concept explainers
Identify the financial statement that should be prepared by a private college or university and public college or university.
Explanation of Solution
As per FASB (Financial Accounting Standard Board) the private colleges and universities are required to prepare
Moreover, they have greater flexibility like business organizations for the preparation of financial statements. Thus, the private universities and colleges can prepare either multi or single-step statements of activities and can prepare statement of cash flows using direct or indirect method.
In case of public colleges and universities, GASB (Governmental Accounting Standard Board) standards state that such institutions has to prepare balance sheet or statement of net position, statement of revenues, expenses, and changes in net position, and statement of cash flows.
GASB does not permit an option of flexibility for public colleges and universities with respect to the preparation of financial statements. For Example: As per the standards, these institutions are required to report operating and non-operating activities separately under the statement of revenues, expenses, and changes in net position. Therefore, the public universities has to report the statement of cash flows using direct method.
Want to see more full solutions like this?
Chapter 15 Solutions
Accounting For Governmental & Nonprofit Entities
- What differences besides the names and contents of the three basic statements would a financial statement reader find between a public university and a private, nonprofit university?arrow_forwardWrite a 700 words that analyzes the differences between generally accepted accounting principles for public and private colleges and universities. Explain why it is important to identify whether the institution is Public or Private. Clarify which of the two—public or private—follow the same reporting guidelines as nongovernmental not-for-profit organizations. Analyze, in general terms, the financial statements that must be prepared by a private college or university and those that must be prepared by a public college or university. Identify the major format differences in financial reporting for public and private colleges and universities. Formulate an opinion about which statement provides more transparent information regarding revenues and on the amounts of restricted resources.arrow_forwardThe amount of ‘College fees received from students’ by a Non-profit organization is shown in which of the following?Select one:a. Expenditure accountb. Income accountc. Liability accountd. Assets accountarrow_forward
- Answer all pleasearrow_forwardIdentify the reports that accompany the financial statements of public entities and nonpublic entities.arrow_forwardWhat benefits are derived from including the management’s discussion and analysis in state and local governmental financial reports? What information is required to be included in the MD&A?arrow_forward
- Complete the blank as appropriate: Governmental financial reporting focuses on stewardship and .......arrow_forwardDiscuss what you found in the Fiscal Service's TFX websiteLinks to an external site. that you think will be helpful in federal financial management ?arrow_forwardWho should set accounting standards? A government agency or private body such as the FASB?arrow_forward
- What note disclosures are specific to nonprofits or government entities, and why are they needed? In your opinion, what are some of the note disclosures that are challenging to write? Explain.arrow_forwardon are some wong. 19. List and explain the two classes of net assets for private, not-for-profit colleges and universitiesarrow_forwardIn preparing GAAP-based financial reports, nonprofit organizations must present their expenses by both natural classification and function. Which of the following is/are acceptable approaches? Within the notes to the financial statements As a separate statement/schedule Within the statement of activities Within the statement of financial positionarrow_forward
Auditing: A Risk Based-Approach to Conducting a Q...AccountingISBN:9781305080577Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:South-Western College Pub
Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax College
Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning