Exam 16: Accounting for Health Care Organizations

An annual contributor to a nongovernmental not-for-profit hospital made an unrestricted pledge in October 2019 that will be paid in March 2020. Assuming the hospital's fiscal year-end is December 31, 2019, the pledge should be credited to:

Under the FASB GAAP hierarchy the AICPA Audit and Accounting Guide Health Care Entities would be category (b) authoritative guidance.

The primary source of revenue for most hospitals is:

Assets limited as to use are assets without donor restrictions whose use is limited by parties other than donors or grantors.

Which of the following would be considered service revenue of a health care entity?

When assessing the financial condition of a health care entity, the average age of plant measure assists with assessing the short-term need for capital resources.

"The goal of financial and operational analysis for the manager is to determine the creditworthiness of the health care organization." Do you agree with the statement? Why or why not?

Unlike other not-for-profit entities, the FASB requires health care entities to prepare a statement of changes in net assets.

Which of the following statements concerning the Patient Protection and Affordable Care Act (also known as the Affordable Care Act) is True?

In accordance with the FASB Codification, donated medicines that normally would be purchased by a hospital should be recorded at fair value and credited to which of the following?

The "equity" section (assets minus liabilities) of a health care entity's balance sheet or statement of net position will indicate whether the health care organization is for-profit, not-for-profit, or governmental.

A contractual adjustment is recorded as a contra-revenue account.

The goal of financial and operational analysis of a health care entity is to determine if the entity is profitable.

Continuing care retirement communities (CCRC) provide residential care in a facility, along with some level of long-term medical care that is less intensive that hospital care.

Which of the following is (are) considered an authoritative source of GAAP for nongovernmental not-for-profit health care entities?

Health care is provided by organizations that may be for-profit, not-for-profit, or governmental; although over half of all nonfederal health care is provided by not-for-profit entities.

FASB standards require that not-for-profit health care entities prepare a statement of changes in net assets.

In accordance with the FASB Codification, which of the following would be an appropriate performance indicator for a not-for-profit health care organization?

Charity service and bad debts in a government hospital that follows business-type accounting are:

A nongovernmental not-for-profit health care entity would report the net asset categories unrestricted, restricted, and net investment in capital assets.