Assume that a private university collects tuition and fees at the beginning of summer school, in which two weeks are offered in the first fiscal year and the remaining six weeks are offered in the second fiscal year. According to the approach recommended by the National Association of College and University Business Officers (NACUBO), the university would:
A. record the collections as a debit to Cash and a credit to Deferred Revenue for the entire amount of the collections.
B. account for the entire tuition and fees as revenue in the first fiscal period.
C. recognize revenue in the first fiscal period for two-eighths of the tuition and fees and record six-eighths of the collections as a deferred revenue.
D. record the collections as a debit to Cash and a credit to Restricted current revenue for the entire amount of the collections.
Answer: C
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