Question 1

Which of the following is true regarding revenue recognition for health care organizations?

Accepted Answer

A)  Patient service revenue is reported net of contractual adjustments. 
B)  Patient service revenue includes an imputed charge for charity care. 
C)  Both (a) and (b) above. 
D)  Neither (a) nor (b) above. 
A)  Patient service revenue is reported net of contractual adjustments. 
B)  Patient service revenue includes an imputed charge for charity care. 
C)  Both (a) and (b) above. 
D)  Neither (a) nor (b) above.

Question 2

According to the AICPA Audit and Accounting Guide: Health Care Organizations,which of the following items should not be included in the determination of the performance indicator?

Accepted Answer

A)  Receipt of temporarily or permanently restricted contributions. 
B)  Items requiring separate display (such as extraordinary items, discontinued operations, and the effect of changes in accounting principle). 
C)  Both (a) and (b) above. 
D)  Neither (a) nor (b) above. 
A)  Receipt of temporarily or permanently restricted contributions. 
B)  Items requiring separate display (such as extraordinary items, discontinued operations, and the effect of changes in accounting principle). 
C)  Both (a) and (b) above. 
D)  Neither (a) nor (b) above.

Question 3

Contractual allowances for amounts billed to 3rd parties are treated as:

Accepted Answer

A)  Contractual allowance expense. 
B)  A bad debt expense. 
C)  A contra-revenue. 
D)  An other financing use. 
A)  Contractual allowance expense. 
B)  A bad debt expense. 
C)  A contra-revenue. 
D)  An other financing use.

Question 4

The level of charity care should be disclosed in the notes to financial statements.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is a required statement for a governmental hospital?

Accepted Answer

A)  Statement of Changes in Fund Balance. 
B)  Statement of Revenues and Expenditures. 
C)  Statement of Functional Expense. 
D)  Statement of Cash Flows. 
A)  Statement of Changes in Fund Balance. 
B)  Statement of Revenues and Expenditures. 
C)  Statement of Functional Expense. 
D)  Statement of Cash Flows.

Question 6

Which of the following health care organizations must follow standards established by the Governmental Accounting Standards Board?

Accepted Answer

A)  Private not-for-profit hospitals. 
B)  Government owed hospitals. 
C)  Both (a) and (b) above. 
D)  Neither (a) nor (b)above. 
A)  Private not-for-profit hospitals. 
B)  Government owed hospitals. 
C)  Both (a) and (b) above. 
D)  Neither (a) nor (b)above.

Question 7

Which of the following is true regarding the financial statements of a private sector not-for-profit hospital?

Accepted Answer

A)  Revenues are measured using the accrual basis of accounting. 
B)  Changes in net assets must be shown by net asset classification. 
C)  The Statement of Cash Flows uses a three-category format. 
D)  All of the above are true. 
A)  Revenues are measured using the accrual basis of accounting. 
B)  Changes in net assets must be shown by net asset classification. 
C)  The Statement of Cash Flows uses a three-category format. 
D)  All of the above are true.

Question 8

Like charities and private colleges,private not-for-profit health care organizations follow FASB standards.

Accepted Answer

A) True 
 B)False

Question 9

Contractual adjustments from insurance companies are reported as expenses in the Statement of Operations.

Accepted Answer

A) True 
 B)False

Question 10

St.Mark's is a private not-for-profit hospital.At the end of December 2013,a donor pledged to make five payments of $45,000,on January 1,2014,- 2018.The contributions are restricted to pay for operations in those years.The present value of these payments is $200,930,discounted at 6%.The contribution was not restricted as to purpose.Record all entries required for 2013 and 2014.

Accepted Answer

The answer of St.Mark's is a private not-for-profit hospital.At the...

Question 11

Both commercial and not-for-profit hospitals in the private sector follow FASB standards.

Accepted Answer

A) True 
 B)False

Question 12

With respect to health care organizations,expenses must be reported using their natural classifications.

Accepted Answer

A) True 
 B)False

Question 13

Dukes Medical Center performed charity care at a cost of $5,000 and a standard charge of $11,000.How much should Dukes recognize as revenue?

Accepted Answer

A)  $11,000. 
B)  $ 6,000. 
C)  $ 5,000. 
D)  $ 0 
A)  $11,000. 
B)  $ 6,000. 
C)  $ 5,000. 
D)  $ 0

Question 14

For hospitals,contractual adjustments to 3rd party payers,such as insurance companies,are recorded with a debit to Contractual Adjustments (a contra-revenue account)and a credit to an allowance for contractual adjustments.

Accepted Answer

A) True 
 B)False

Question 15

Health care organizations that are privately owned and operated to provide a return to investors follow FASB standards excluding those standards specifically for not-for-profits.

Accepted Answer

A) True 
 B)False

Question 16

According to The AICPA Health Care Guide,Transfers among affiliated organizations should not be included in the determination of a performance indicator for a health care organization.

Accepted Answer

A) True 
 B)False

Question 17

Government-owned health care organizations do not report depreciation expense.

Accepted Answer

A) True 
 B)False

Question 18

The equity section of governmentally-owned hospitals includes nonspendable,restricted,committed and assigned fund balances.

Accepted Answer

A) True 
 B)False

Question 19

A private not-for-profit entity estimated its Allowance for Contractual Adjustment.During the next year,the hospital found that the actual total of contractual adjustments applied to receivables on hand at the end of the previous year was $ 5,000 higher than the estimate.How should the difference be reported?

Accepted Answer

A)  The hospital should reduce current period net patient service revenues for the $5,000. 
B)  The hospital should make a prior period adjustment to retained earnings for $5,000. 
C)  The hospital should record a current period expense for the $5,000. 
D)  The hospital should record a "cumulative effect of a change in accounting principle" for the $5,000. 
A)  The hospital should reduce current period net patient service revenues for the $5,000. 
B)  The hospital should make a prior period adjustment to retained earnings for $5,000. 
C)  The hospital should record a current period expense for the $5,000. 
D)  The hospital should record a "cumulative effect of a change in accounting principle" for the $5,000.

Question 20

Which of the following is true regarding revenue recognition for health care organizations?

Accepted Answer

A)  Patient service revenues are reported net of contractual adjustments. 
B)  Revenues do not include charity care. 
C)  Revenues may include fees for parking, cafeteria sales, and gift shops. 
D)  All of the above are true. 
A)  Patient service revenues are reported net of contractual adjustments. 
B)  Revenues do not include charity care. 
C)  Revenues may include fees for parking, cafeteria sales, and gift shops. 
D)  All of the above are true.

Which of the following is true regarding revenue recognition for health care organizations?

According to the AICPA Audit and Accounting Guide: Health Care Organizations,which of the following items should not be included in the determination of the performance indicator?

Contractual allowances for amounts billed to 3^rd parties are treated as:

The level of charity care should be disclosed in the notes to financial statements.

Which of the following is a required statement for a governmental hospital?

Which of the following health care organizations must follow standards established by the Governmental Accounting Standards Board?

Which of the following is true regarding the financial statements of a private sector not-for-profit hospital?

Like charities and private colleges,private not-for-profit health care organizations follow FASB standards.

Contractual adjustments from insurance companies are reported as expenses in the Statement of Operations.

Both commercial and not-for-profit hospitals in the private sector follow FASB standards.

With respect to health care organizations,expenses must be reported using their natural classifications.

Dukes Medical Center performed charity care at a cost of $5,000 and a standard charge of $11,000.How much should Dukes recognize as revenue?

For hospitals,contractual adjustments to 3^rd party payers,such as insurance companies,are recorded with a debit to Contractual Adjustments (a contra-revenue account)and a credit to an allowance for contractual adjustments.

Health care organizations that are privately owned and operated to provide a return to investors follow FASB standards excluding those standards specifically for not-for-profits.

According to The AICPA Health Care Guide,Transfers among affiliated organizations should not be included in the determination of a performance indicator for a health care organization.

Government-owned health care organizations do not report depreciation expense.

The equity section of governmentally-owned hospitals includes nonspendable,restricted,committed and assigned fund balances.

Which of the following is true regarding revenue recognition for health care organizations?

Introduction to Accounting and Financial Reporting for Governmental and Not-For-Profit Organizations

Overview of Financial Reporting for State and Local Governments

Modified Accrual Accounting: Including the Role of Fund Balances and Budgetary Authority

Accounting for the General and Special Revenue Funds

Accounting for Other Governmental Fund Types: Capital Projects, Debt Service, and Permanent

Proprietary Funds

Fiduciary Trustfunds

Government-Wide Statements, Capital Assets, Long-Term Debt

Accounting for Special-Purpose Entities, Including Public Colleges and Universities

Accounting for Private Not-For-Profit Organizations

College and University Accounting Private Institutions

Auditing, Tax-Exempt Organizations, and Evaluating Performance

Financial Reporting by the Federal Government

Filters

Exam 12: Accounting for Hospitals and Other Health Care Providers

Which of the following is true regarding revenue recognition for health care organizations?

According to the AICPA Audit and Accounting Guide: Health Care Organizations,which of the following items should not be included in the determination of the performance indicator?

Contractual allowances for amounts billed to 3rd parties are treated as:

The level of charity care should be disclosed in the notes to financial statements.

Which of the following is a required statement for a governmental hospital?

Which of the following health care organizations must follow standards established by the Governmental Accounting Standards Board?

Which of the following is true regarding the financial statements of a private sector not-for-profit hospital?

Like charities and private colleges,private not-for-profit health care organizations follow FASB standards.

Contractual adjustments from insurance companies are reported as expenses in the Statement of Operations.

Both commercial and not-for-profit hospitals in the private sector follow FASB standards.

With respect to health care organizations,expenses must be reported using their natural classifications.

Dukes Medical Center performed charity care at a cost of $5,000 and a standard charge of $11,000.How much should Dukes recognize as revenue?

For hospitals,contractual adjustments to 3rd party payers,such as insurance companies,are recorded with a debit to Contractual Adjustments (a contra-revenue account)and a credit to an allowance for contractual adjustments.

Health care organizations that are privately owned and operated to provide a return to investors follow FASB standards excluding those standards specifically for not-for-profits.

According to The AICPA Health Care Guide,Transfers among affiliated organizations should not be included in the determination of a performance indicator for a health care organization.

Government-owned health care organizations do not report depreciation expense.

The equity section of governmentally-owned hospitals includes nonspendable,restricted,committed and assigned fund balances.

Which of the following is true regarding revenue recognition for health care organizations?

Introduction to Accounting and Financial Reporting for Governmental and Not-For-Profit Organizations

Overview of Financial Reporting for State and Local Governments

Modified Accrual Accounting: Including the Role of Fund Balances and Budgetary Authority

Accounting for the General and Special Revenue Funds

Accounting for Other Governmental Fund Types: Capital Projects, Debt Service, and Permanent

Proprietary Funds

Fiduciary Trustfunds

Government-Wide Statements, Capital Assets, Long-Term Debt

Accounting for Special-Purpose Entities, Including Public Colleges and Universities

Accounting for Private Not-For-Profit Organizations

College and University Accounting Private Institutions

Auditing, Tax-Exempt Organizations, and Evaluating Performance

Financial Reporting by the Federal Government

Filters

Contractual allowances for amounts billed to 3^rd parties are treated as:

For hospitals,contractual adjustments to 3^rd party payers,such as insurance companies,are recorded with a debit to Contractual Adjustments (a contra-revenue account)and a credit to an allowance for contractual adjustments.