Question

Which of the following is a reporting difference between a governmental college following GASB standards for business-type reporting and a nongovernmental not-for-profit college following FASB standards?

A) The requirement that revenues and expenses be reported on the accrual basis.
B) The requirements for non-recognition of works of art and historical treasures on the financial statements.
C) The requirement that investments be reported at fair value.
D) The requirement that revenues and expenses be reported as operating and non-operating.

Answer 1

The reporting difference between a governmental college following GASB standards and a nongovernmental not-for-profit college following FASB standards is the requirement for accrual basis reporting.

Step-by-step explanation:

The reporting difference between a governmental college following GASB standards for business-type reporting and a nongovernmental not-for-profit college following FASB standards is the requirement that revenues and expenses be reported on the accrual basis. Under GASB, governmental colleges are required to report their financial activities on the accrual basis, which means recognizing revenues and expenses when they are earned or incurred, regardless of when cash is received or paid. On the other hand, FASB allows not-for-profit colleges to report their revenues and expenses on either the accrual or cash basis.