Public Colleges and Universities That Choose to Report as Special-Purpose

question 1

Multiple Choice

Public colleges and universities that choose to report as special-purpose entities engaged only in business-type activities would have which of the following financial statements?

• A) Statement of Net Position, Statement of Activities.
• B) Statement of Net Position, Statement of Revenues, Expenses, and Changes in Net Position.
• C) Statement of Net Position, Statement of Revenues, Expenses, and Changes in Net Position, Statement of Cash Flows.
• D) None of the above.

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Definitions:

Sustainable Growth Rate

The maximum rate at which a company can grow its revenues and profits without increasing financial leverage or external equity.

Retention Ratio

The share of net income not disbursed as dividends to shareholders but rather reserved by the business for various uses.

Dividend Payout Ratio

The fraction of net income a firm pays to its shareholders in the form of dividends, compared to the portion reinvested in the business.

Percentage of Sales Approach

A method used in financial forecasting to estimate various elements of a financial statement as a percentage of forecasted sales.