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) Public colleges do not 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 in the state CAFR, but it is not always the case. It depends on the reporting requirements of the state.

Answer: B
 Revenue sources for public colleges include tuition and fees, state appropriations, donations, and other sources. Income from unrelated business activities is reported separately as unrelated business income.

Answer: C
 Public colleges do not have the authority to issue debt on their own. Debt must be issued by the state as general obligation debt.

Answer: D
 Public colleges have the option to report as special-purpose entities engaged in business-type activities, such as auxiliary enterprises or hospitals, and these activities are accounted for separately.

Which of the Following Is True with Respect to Public