When a Private College or University Has a Foundation,and That

question 27

Multiple Choice

When a private college or university has a foundation,and that foundation receives contributions specifically directed for the benefit of the college or university,

• A) The college or university records no revenue until monies are received from the foundation
• B) The college or university must recognize its interest in the contribution as an asset and revenue at the same time as the foundation.
• C) At the time of the contribution to the foundation, the college or university records an increase in net assets and unearned revenue. When the money is received the unearned revenue is reduced and revenue is recorded.
• D) None of the above

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Definitions:

Consumption

The usage of resources or products for the purpose of satisfying human needs or wants.

Interest Rate

The amount charged by a lender to a borrower for the use of assets, expressed as a percentage of the principal.

Income

The monetary payment received for one's work, investments, or other sources, primarily used for personal consumption, savings, and investment.

Present Value

The present value of an expected amount of money or sequence of cash flows, with a given return rate.