Question

NACUBO provides guidance to colleges and universities that causes the reporting for nongovernmental not-for-profit colleges and universities to differ from that of nongovernmental voluntary health and welfare organizations. Which of the following would be reported differently by a voluntary health and welfare organization and a nongovernmental not-for-profit college?

A) An increase in estimated uncollectible receivables.
B) Depreciation expense on buildings and equipment.
C) Division of expenses into program and support functions.
D) Grant revenue restricted for a specific purpose.

Answer 1

Voluntary health and welfare organizations divide expenses into program and support functions(option c), which is different from not-for-profit colleges and universities that classify expenses by functions related to their educational mission.

Step-by-step explanation:

The reporting for nongovernmental not-for-profit colleges and universities differs from that of nongovernmental voluntary health and welfare organizations in various ways according to the guidance provided by the National Association of College and University Business Officers (NACUBO).

Among the choices given, the item reported differently would be C) Division of expenses into program and support functions. Specifically, voluntary health and welfare organizations classify their expenses according to program services and supporting services, which include management and general, fundraising, and membership development activities.

On the other hand, not-for-profit colleges and universities often present their expenses by functional classification, such as instruction, research, public service, academic support, student services, institutional support, operation and maintenance of plant, and scholarships and fellowships.