Final answer:
NACUBO guidelines dictate that summer school revenues and expenses be recognized in the fiscal year they are earned and incurred, split according to the accrual basis of accounting over the fiscal year-end.
Step-by-step explanation:
According to the National Association of College and University Business Officers (NACUBO) guidelines, the correct treatment for recognizing summer school revenues and expenses for a college whose fiscal year ends on June 30 is to report these financial activities based on when they are earned and incurred respectively. Since the summer session often spans the end of one fiscal year and the beginning of another, revenues and expenses should be appropriately apportioned and recognized in each fiscal year based on the portion of the summer session falling within each fiscal year.
This follows the accrual basis of accounting, which dictates that revenues and expenses are recognized when they are earned, regardless of when the cash is received or paid. Therefore, if the summer school starts in June but ends in July, a college would recognize the revenues and expenses for the June portion in the current fiscal year, and the revenues and expenses for July in the next fiscal year.