Which of the Following Receipts May Properly Be Accounted for as an Increase

question 14

Multiple Choice

Which of the following receipts may properly be accounted for as an increase in net assets without donor restrictions by a private college?

• A) Student tuition and fees.
• B) Gift from an alumnus for a new college of business building.
• C) Federal grant for genetic research.
• D) Acceptance of assets, the income from which will be paid to the donor.

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Definitions:

Audit Liability

The legal responsibility auditors face for failing to detect or report inaccuracies in financial statements.

Securities Exchange Act

A U.S. federal law enacted in 1934 to govern the trading of securities, such as stocks and bonds, in the secondary market, aiming to promote transparency, fairness, and integrity in the marketplaces.

SEC Rule 10b-5

A regulation by the Securities and Exchange Commission that prohibits fraud and misrepresentation in securities trading.

Privity

A doctrine in contract law that holds that contracts are private agreements between the parties who have mutually consented to them, and thus, only those parties have the rights and liabilities under the contract.