Which of the following is true with respect to public four-year higher education institutions (public colleges)?
A) Sometimes, but not always public colleges are included as component units in the state CAFR
B) Revenue sources for public colleges include tuition and fees, state appropriations and donations. All other income is reported as unrelated business income.
C) No public colleges have the power to issue debt; it must be issued by the state as general obligation debt.
D) Public colleges may not choose to report as special-purpose entities engaged only in business-type activities.

Question

Quizplus · Accepted Answer

Public colleges may be included as component units in the state Comprehensive Annual Financial Report (CAFR), but it is not mandatory.

Answer: B
 Revenue sources for public colleges include tuition and fees, state appropriations, grants, and contracts. Donations and investment income are reported separately on the financial statements. Unrelated business income applies to income generated from activities outside of the college's core educational mission.

Answer: D
 Public colleges may report as special-purpose entities engaged only in business-type activities if their primary objective is to provide goods or services that benefit external parties. However, most public universities provide educational services that benefit the general public and do not qualify as special-purpose entities.

Which of the Following Is True with Respect to Public