GASB Requires That Educational Institutions Who Engage in Business-Type Activities

question 29

Multiple Choice

GASB requires that educational institutions who engage in business-type activities and issue debt account for the debt by:

• A) Recording the debt service as an expenditure as it becomes due.
• B) Recording the interest as an expense when it is due and payable.
• C) Recording the principal net of any premium or discount when the debt is issued and expense the interest as it is paid.
• D) Recording the interest expense on the accrual basis, including amortizing the premium or discount, if applicable.

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Definitions:

Financial Components

Various elements that make up the financial structure of an organization, such as assets, liabilities, revenue, and expenses.

Administrative Operations

The tasks and activities related to the management and execution of fundamental organizational functions and office duties.

Time Zone Map

A representation of the Earth's surface divided into time zones, showing the division of the world into regions with standardized time.

Long-Distance Phone Calls

Calls made over a large distance that can span different cities, states, or countries, typically involving higher costs.