The NACUBO Financial Accounting and Reporting Manual Treats Estimates of Uncollectible

question 11

Multiple Choice

The NACUBO Financial Accounting and Reporting Manual treats estimates of uncollectible accounts as:

• A) Bad debt expense
• B) A reduction in tuition and fee revenue
• C) Either bad debt expense or a reduction in tuition and fee revenue as long as the policy is consistently applied
• D) None of the above; colleges and universities must use the direct write off method

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Definitions:

AGI

Adjusted Gross Income, which is the total gross income minus specific deductions allowable by the IRS, forming the basis for calculating taxable income.

Maximum Contribution

Maximum Contribution refers to the highest amount that an individual or entity can contribute to a retirement plan or investment vehicle in a given year.

Employer-Sponsored Plans

Retirement or health benefit plans offered to employees by their employer, including 401(k) and pension plans.

Coverdell Education

A savings account designed to help families pay for education expenses, offering tax-free growth and withdrawals when for qualified education costs.