Problem

A private not-for-profit university charges its students tuition of SI million. However, f...

A private not-for-profit university charges its students tuition of SI million. However, financial aid grants total $220,000. In addition, the school receives a $100,000 grant restricted for faculty salaries. Of this amount, it spent $30,000 appropriately this year. On the statement of activities, the school reports three categories: (1) revenues and support, (2) net assets reclassified, and (3) expenses. Which of the following is not true?

a. Unrestricted net assets should show an increase of $30,000 for net assets reclassified.

b. In the unrestricted net assets, the revenues and support should total $1 million.

c. Unrestricted net assets should recognize expenses of $30,000.

d. Unrestricted net assets shows the $220,000 as a direct reduction to the tuition revenue balance.

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