A Not-For-Profit University Operates Its College Book-Store as an Auxiliary

question 34

Multiple Choice

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

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Definitions:

Trial Balance

A bookkeeping worksheet in which the balances of all ledgers are compiled into debit and credit account column totals that are equal to ensure the accounting system's mathematical correctness.

Errors

Errors are mistakes or inaccuracies that occur in financial statements or other business documents, often necessitating corrections.

Debits

The left side of an accounting ledger where increases in expenses, assets, or decreases in liabilities and equities are recorded.

Credits

Entries in the accounting system that represent an increase in liabilities or equity or a reduction in assets, commonly associated with income and receipts.