ACCOUNTING FOR NPE COLLEGES AND UNIVERSITIES

LABELS:

Yellow: Correct answer

Red: Wrong answer

Cyan: Suggested answer

1. Where should an alumnus contribution of P50,000 to pay for scholarships for international study be
accounted for?

Current restricted fund

2. Which of the following is not an example of general and educational expenses recorded by a college
or university?

Purchase of sweatshirts for sale in the college bookstore

3. A collection of first editions is donated to Southern Luzon State University for its library. Which is
the correct credit?

No entry is required

4. Calbayog Institute of Science and Technology, an NPE, as of June 30, 2020, and for the year ended:

I. Unrestricted net assets comprised P7,500,000 of assets and P4,500,000 of liabilities (including
deferred revenues of P15,000). Among the receipts recorded during the year were unrestricted gifts of
P550,000 and restricted grants totaling P330,000, of which P220,000 was expended during the year for
current operations and P110,000 remained unexpended at the close of the year.

II. Volunteers from the surrounding communities regularly contribute their service to the school and
paid nominal amounts to cover their travel costs. During the year, travel costs reimbursed to
volunteers aggregated to P18,000. The gross value of services performed by the volunteers and
determined by reference to equivalent wages available in that area for similar services amounted to
P200,000. The school normally purchases these types of contributed services, and it believes that
these services enhance its assets.

At June 30, 2020, the school’s unrestricted net assets balance was

P3,000,000
5. Calbayog Institute of Science and Technology, an NPE, as of June 30, 2020, and for the year ended:

I. Unrestricted net assets comprised P7,500,000 of assets and P4,500,000 of liabilities (including
deferred revenues of P15,000). Among the receipts recorded during the year were unrestricted gifts of
P550,000 and restricted grants totaling P330,000, of which P220,000 was expended during the year for
current operations and P110,000 remained unexpended at the close of the year.

II. Volunteers from the surrounding communities regularly contribute their service to the school and
paid nominal amounts to cover their travel costs. During the year, travel costs reimbursed to
volunteers aggregated to P18,000. The gross value of services performed by the volunteers and
determined by reference to equivalent wages available in that area for similar services amounted to
P200,000. The school normally purchases these types of contributed services, and it believes that
these services enhance its assets.

For the year ended June 30, 2020, what amount should be included in the school’s revenue for the
unrestricted gifts and restricted grants?

P880,000

6. Endowment income was restricted to student aid activities. Cash is paid for all activities. Which is
the credit necessary for classification?

Reclassification in-temporarily restricted, satisfaction of program restrictions

7. What is the basis of accounting used in accounting for NPE college or university?

Accrual basis

8. For the summer session of 2020, Ateneo de Manila University assessed its students P1,700,000 (net
of refunds) covering tuition and fees for educational and general purposes. However, only P1,500,000
was expected to be realized because scholarships totaling P150,000 had been granted to students for
which services are rendered, and tuition remissions of P50,000 had been allowed to faculty members’
children attending Ateneo. How much should Ateneo report for the summer session ended 2020 as net
revenue from tuition and fees?

P1,650,000

9. Unrestricted current funds of Malayan University designated by the governing board for a specific
future purpose should be reported as part of

Unrestricted net assets

10. An alumni donates P10,000 to University of the Philippines for a new Women’s Studies program.
The alumni wants the principal to remain intact but the investment earnings can be used to support the
Women’s Studies program. This donation would be accounted for in the:

Endowment fund

11. The Divine Word College issues long-term debt to build a bridge over the gap between two main
campuses. The debt would be accounted for in the

Investment in plant

12. An NPE college received an offer from an engineer, an alumnus, to teach Engineering Math for one
semester at no cost. This contribution of service

Should be recorded as a revenue with an equivalent amount recorded as an expenditure

13. For the summer session of 2020, Ateneo de Manila University assessed its students P1,700,000 (net
of refunds) covering tuition and fees for educational and general purposes. However, only P1,500,000
was expected to be realized because scholarships totaling P150,000 had been granted to students for
which no services are rendered, and tuition remissions of P50,000 had been allowed to faculty
members’ children attending Ateneo. What amount should Ateneo include as net revenues from
student tuition and fees?

P1,500,000

14. NPE college or university student unions, dormitories, and residence halls are considered

Auxiliary enterprises

15. Unexpended plant fund accounts for:

Assets allotted for future plant acquisition

16. A university’s long-term boards issued to build dormitories would be recorded in the

Investment in plant fund

17. The quasi-endowment fund of St. Augustine University would account funds set aside by

The governing board of the university for future purpose

18. Catarman University has the following information:

On December 31, 2020, the total liabilities amounted to:

P1,130,000

19. A life income fund is used when

All income earned on donated assets are to be paid to the donor for his/her lifetime

20. Catarman University has the following information:

On December 31, 2020, the total assets amounted to:

P5,365,000
21. For the 1st semester of 2020, DLSU-D assessed its students P4,000,000 (net of refunds), covering
tuition and fees for educational and general purposes. However, only P3,700,000 was expected to be
realized because tuition remissions of P80,000 were allowed to faculty members’ children attending
DLSU-D, and scholarships with services rendered to the university totaling P220,000 were granted to
students. What amount should DLSU-D include in net revenue from student tuition and fees for the
first semester ended 2020?

P3,920,000

22. Which plant fund subgroup would consider the following transaction. A bond principal payment is
made on a bond that was issued with the proceeds being designated for construction of a new
gymnasium?

Plant fund for retirement of indebtedness

23. For the summer session of 2020, Ateneo de Manila University assessed its students P1,700,000 (net
of refunds) covering tuition and fees for educational and general purposes. However, only P1,500,000
was expected to be realized because scholarships totaling P150,000 had been granted to students for
which no services are rendered, and tuition remissions of P50,000 had been allowed to faculty
members’ children attending Ateneo. The increase in unrestricted net assets for the summer session
ended 2020 amounted to

P1,500,000

24. Private grants which are essentially pass through financial aid to students are accounted for as

Agency transactions

25. For San Sebastian College-Recoletos, the receipt for operating activities that have external
restrictions as to the purpose for which they can be used is recorded by crediting:

Contribution Revenue

26. The loan fund of Pangasinan State University would account for loans

To university students

27. Which of the following is not an example of general and educational revenues of an NPE college or
university?

Room and board fees received by the dormitory

28. In an NPE university, government grants given directly to students are an example of

An agency transaction
29. For the 1st semester of 2020, DLSU-D assessed its students P4,000,000 (net of refunds), covering
tuition and fees for educational and general purposes. However, only P3,700,000 was expected to be
realized because tuition remissions of P80,000 were allowed to faculty members’ children attending
DLSU-D, and scholarships with services rendered to the university totaling P220,000 were granted to
students. What amount should DLSU-D include in educational and general current funds or gross
revenues (net of refunds) from student tuition and fees?

P4,000,000

30. Cebu Central University budget funds for the maintenance and repair of its building. These funds
would be accounted for under

Plant fund for renewals and replacements

31. The Board of Trustees decides to set aside P5,000,000 to consider purchasing additional land on
the first month of the next fiscal year. What type of transfer is this?

Discretionary

32. CALEB decides to contribute P1,000,000 to his alma mater. Southwestern Samar College agrees to
pay CALEB a fixed amount every month for the next 20 years in exchange for the donation. CALEB’s
donation would be accounted for in the

Annuity fund

33. Which of the following is not correct?

Expenses denote outlay of resources

34. Which of the following is not an example of the major categories of funds for an NPE college or
university?

Proprietary funds

35. Which of the following receipts should be recorded in the restricted current fund of an NPE
university?

A cash donation to provide scholarships

36. Which of the following funds of an NPE university makes periodic payments of a fixed amount at
equal intervals

Annuity fund

37. In accounting for loan funds, revenue is recorded when the

Contribution is received
38. The type of endowment fund for which the principal may be expended after the occurrence of an
event specified by the donor is a/an

None of these

39. Which university fund is most similar to the governmental general fund?

Current-unrestricted

40. In a university, class cancellation refunds of tuition and fees should be recorded as

I. Reduction of revenue from tuition and fees.

II. Reduction of accounts receivable

I only

41. The following funds were among those on Holy Spirit University’s books at December 31, 2020:

 Funds to be used for acquisition of additional property for university purposes (unexpended at
12/31/2020) – P3,000,000
 Funds set aside for debt service charges and for the retirement of indebtedness on university’s
property – P7,000,000

P10,000,000

42. All of the following are plant funds in colleges and universities except:

Plant replacement and expansion fund

43. An alumnus made a donation of an adjoining land to a university. The university would record the
gift as

An unrestricted revenue

44. Admissions, counseling, and registration are considered to be:

Student services
45. Calbayog Institute of Science and Technology, an NPE, as of June 30, 2020, and for the year ended:

I. Unrestricted net assets comprised P7,500,000 of assets and P4,500,000 of liabilities (including
deferred revenues of P15,000). Among the receipts recorded during the year were unrestricted gifts of
P550,000 and restricted grants totaling P330,000, of which P220,000 was expended during the year for
current operations and P110,000 remained unexpended at the close of the year.

II. Volunteers from the surrounding communities regularly contribute their service to the school and
paid nominal amounts to cover their travel costs. During the year, travel costs reimbursed to
volunteers aggregated to P18,000. The gross value of services performed by the volunteers and
determined by reference to equivalent wages available in that area for similar services amounted to
P200,000. The school normally purchases these types of contributed services, and it believes that
these services enhance its assets.

For the year ended June 30, 2020, what amount should the school record as contribution revenue from
the volunteers’ services?

P200,000

46. Which of the following is an example of an inter-fund transaction?

Cash is set aside for payment of a mortgage

47. Calbayog Institute of Science and Technology, an NPE, as of June 30, 2020, and for the year ended:

I. Unrestricted net assets comprised P7,500,000 of assets and P4,500,000 of liabilities (including
deferred revenues of P15,000). Among the receipts recorded during the year were unrestricted gifts of
P550,000 and restricted grants totaling P330,000, of which P220,000 was expended during the year for
current operations and P110,000 remained unexpended at the close of the year.

II. Volunteers from the surrounding communities regularly contribute their service to the school and
paid nominal amounts to cover their travel costs. During the year, travel costs reimbursed to
volunteers aggregated to P18,000. The gross value of services performed by the volunteers and
determined by reference to equivalent wages available in that area for similar services amounted to
P200,000. The school normally purchases these types of contributed services, and it believes that
these services enhance its assets.

What amount of total revenue from the above-mentioned transactions would be recognized as
revenues?

P970,000

48. Any restrictions on gifts, grants, or bequests received by NPE university are imposed by

Donors
49. NPE college or university student unions, dormitories, and residence halls are considered

Auxiliary enterprises

50. Which of the following is a mandatory transfer by Ateneo de Naga University?

Principal and interest payments on long-term debt 

LONG PROBLEM – DAYAG COLLEGE

The preclosing trial balance of Dayag College of Business and the Arts shows the following balances:
1. In the statement of activities, unrestricted column, net assets at the end of the year is 395000 (please do not
use peso sign, comma, or decimal)

2. In the statement of activities, temporarily restricted column, total revenues and gains excluding other support
is 240000 (please do not use peso sign, comma, or decimal)

3. In the statement of activities, unrestricted column, decrease in net assets is 280000 (please do not use peso
sign, comma, or decimal)

4. In the statement of activities, total unrestricted, temporarily restricted, and permanently restricted revenues
and gains excluding other support is 4055000 (please do not use peso sign, comma, or decimal)

5. In the statement of activities, total expenses (expenditures) and losses (other deduction) is 3970000 (please
do not use peso sign, comma, or decimal)

6. In the statement of activities, permanently restricted column, net assets at the end of the year is 3000000
(please do not use peso sign, comma, or decimal)

7. In the statement of activities, temporarily restricted column, decrease in net assets is 135000 (please do not
use peso sign, comma, or decimal)
8. In the statement of activities, net assets (restricted and unrestricted) at the end of the year is 4235000
(please do not use peso sign, comma, or decimal)

9. In the statement of activities, unrestricted column, total revenues and gains excluding other support is
3315000 (please do not use peso sign, comma, or decimal)

10. In the statement of activities, unrestricted column, total revenues and gains and other other support is
3690000 (please do not use peso sign, comma, or decimal)

11. In the statement of activities, permanently restricted column, total revenues and gains excluding other
support is 500000 (please do not use peso sign, comma, or decimal)

12. In the statement of activities, temporarily restricted column, net assets at the end of the year is 840000
(please do not use peso sign, comma, or decimal)

13. In the statement of activities, permanently restricted column, increase in net assets is 500000 (please do
not use peso sign, comma, or decimal)

14. In the statement of activities, total net assets released from restrictions is 375000 (please do not use peso
sign, comma, or decimal)