Final answer:
Pell Grants received by private colleges are indeed classified as non-operating revenue because they are federal funds for student aid and not tied to institutional operational activities.
Step-by-step explanation:
The statement that Pell Grants received by private colleges are classified as non-operating revenue is true. Pell Grants are federal funds provided to students as financial aid and do not relate directly to the operational activities of a college or university, such as teaching or research. Instead, they are passed through to students and, as such, are recognized as non-operating revenues by the institutions on their financial statements. This distinction is important for accounting and reporting purposes and reflects the nature of these funds as they support students and are not generated by the core activities of the institution.
True. Pell Grants received by private colleges are classified as non-operating revenue. Pell Grants are federal financial aid given to eligible undergraduate students to help pay for college expenses. Since private colleges do not generate revenue from tuition fees like public institutions, Pell Grants are categorized as non-operating revenue on their financial statements.