Which of the Following Statements Is (Are)true Regarding Public Colleges

question 38

Multiple Choice

Which of the following statements is (are) true regarding public colleges and universities choosing to report as special-purpose entities engaged in business-type activities only?

• A) Endowments would be reported in the Statement of Net Assets as Net Assets Restricted-Nonexpendable.
• B) Capital appropriations from state governments are shown, in the Statement of Revenues, Expenses, and Changes in Net Assets, as a category separate from revenues.
• C) Both of the above.
• D) Neither of the above.

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Definitions:

Predetermined Overhead Rate

A rate calculated before a period begins by dividing estimated manufacturing overhead costs by an estimated allocation base, used to allocate overhead costs to products.

Direct Labor-Hours

The total hours worked by employees who are directly involved in the manufacturing process or production of goods.

Manufacturing Overhead

All indirect costs associated with manufacturing, excluding direct materials and direct labor.

Underapplied Manufacturing Overhead

A situation where the allocated manufacturing overhead cost is less than the actual overhead incurred.