Question 1

The GASB and the FASB provide the same criteria for recognizing and reporting services donated to a health care entity.

Accepted Answer

A) True 
 B)False

Question 2

Describe what prepaid health care plans are and some of the related accounting issues.

Accepted Answer

Health maintenance organizations (HMOs)a

Question 3

The primary source of revenue for most hospitals is:

Accepted Answer

A)  Nonexchange transactions, such as contributions. 
B)  Exchange transactions, such as fees for services. 
C)  Investment income. 
D)  Capitation fees from health maintenance organizations. 
A)  Nonexchange transactions, such as contributions. 
B)  Exchange transactions, such as fees for services. 
C)  Investment income. 
D)  Capitation fees from health maintenance organizations.

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

Assets limited as to use are unrestricted assets whose use is limited by parties other than donors or grantors.

Accepted Answer

A) True 
 B)False

Question 6

Contrast the statement of cash flows that nongovernmental not-for-profit hospitals prepare to those that governmental hospitals prepare.

Accepted Answer

Not-for-profit hospitals prepare their c

Question 7

Both the FASB and the GASB would require that a contribution received for the construction of a future medical facility be reported as an investing activity on the statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 8

How would the cash acquisition of equipment be reported on a health care entity's statement of cash flows?

Accepted Answer

A)  Investing activity applying GASB standards. 
B)  Investing activity applying FASB standards. 
C)  Financing activity applying FASB standards. 
D)  Operating activity applying GASB standards. 
A)  Investing activity applying GASB standards. 
B)  Investing activity applying FASB standards. 
C)  Financing activity applying FASB standards. 
D)  Operating activity applying GASB standards.

Question 9

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

Accepted Answer

A)  Both reported as deductions from gross patient revenue in arriving at net patient revenue. 
B)  Both reported as expenses. 
C)  Reported differently, with charity service disclosed in the notes to the financial statements and bad debts reported as a deduction from revenue. 
D)  Reported differently, with charity service reported as a deduction from gross patient revenue and bad debts reported as an expense. 
A)  Both reported as deductions from gross patient revenue in arriving at net patient revenue. 
B)  Both reported as expenses. 
C)  Reported differently, with charity service disclosed in the notes to the financial statements and bad debts reported as a deduction from revenue. 
D)  Reported differently, with charity service reported as a deduction from gross patient revenue and bad debts reported as an expense.

Question 10

The GASB requires business-type health care organizations to prepare which of the following financial statements?

Accepted Answer

A)  Statement of revenues, expenses, and changes in net position; statement of net position; and statement of cash flows. 
B)  Statement of operations; statement of net assets; and a statement of cash flows. 
C)  Statement of revenues, expenses, and changes in net position; and statement of net position. 
D)  Statement of activities; statement of net position; statement of changes in net position; and statement of cash flows. 
A)  Statement of revenues, expenses, and changes in net position; statement of net position; and statement of cash flows. 
B)  Statement of operations; statement of net assets; and a statement of cash flows. 
C)  Statement of revenues, expenses, and changes in net position; and statement of net position. 
D)  Statement of activities; statement of net position; statement of changes in net position; and statement of cash flows.

Question 11

Similar to for-profit entities,under FASB standards,not-for-profit health care entities are required to classify investments into trading,available-for-sale,and held to maturity for reporting purposes.

Accepted Answer

A) True 
 B)False

Question 12

The format for a not-for-profit health care entity's statement of operations is the same as that for other types of not-for-profits; the FASB requires a different title on the statement since most revenues are derived from user charges.

Accepted Answer

A) True 
 B)False

Question 13

Similar to other not-for-profit entities,health care entities are required under FASB standards to report program and support functional expenses.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following could be included in the performance indicator measure provided by a nongovernmental not-for-profit hospital?

Accepted Answer

A)  Contribution to an endowment. 
B)  Gain on sale of equipment. 
C)  Grant restricted for diabetes research. 
D)  Interest income that is temporarily restricted. 
A)  Contribution to an endowment. 
B)  Gain on sale of equipment. 
C)  Grant restricted for diabetes research. 
D)  Interest income that is temporarily restricted.

Question 15

There are three main reasons why a nongovernmental not-for-profit hospital does not receive the full amount that it normally charges for a room: 1)contractual adjustments arising from transactions with third-party payors,2)charity service provided to indigent patients,and 3)bad debts.Compare the accounting treatment for the three reasons listed.

Accepted Answer

Current GAAP requires that contractual a

Question 16

Which of the following is not a financial statement prepared by nongovernmental not-for-profit health care entities?

Accepted Answer

A)  Statement of changes in net assets. 
B)  Statement of revenues, expenses, and changes in net assets. 
C)  Balance sheet. 
D)  Statement of cash flows. 
A)  Statement of changes in net assets. 
B)  Statement of revenues, expenses, and changes in net assets. 
C)  Balance sheet. 
D)  Statement of cash flows.

Question 17

In accounting for health care entities,the account Provision for Bad Debts should be reported as a contra-revenue,rather than as an expense.

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

An annual contributor to a nongovernmental not-for-profit hospital made an unrestricted pledge in October 2016 that will be paid in March 2017.Assuming the hospital's fiscal year-end is December 31,2016,the pledge should be credited to:

Accepted Answer

A)  Contributions-Temporarily Restricted in 2016. 
B)  Contributions-Unrestricted in 2016. 
C)  Contributions-Temporarily Restricted in 2017. 
D)  Contributions-Unrestricted in equal amounts in 2016 and 2017. 
A)  Contributions-Temporarily Restricted in 2016. 
B)  Contributions-Unrestricted in 2016. 
C)  Contributions-Temporarily Restricted in 2017. 
D)  Contributions-Unrestricted in equal amounts in 2016 and 2017.

The GASB and the FASB provide the same criteria for recognizing and reporting services donated to a health care entity.

Describe what prepaid health care plans are and some of the related accounting issues.

The primary source of revenue for most hospitals is:

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

Assets limited as to use are unrestricted assets whose use is limited by parties other than donors or grantors.

Contrast the statement of cash flows that nongovernmental not-for-profit hospitals prepare to those that governmental hospitals prepare.

Both the FASB and the GASB would require that a contribution received for the construction of a future medical facility be reported as an investing activity on the statement of cash flows.

How would the cash acquisition of equipment be reported on a health care entity's statement of cash flows?

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

The GASB requires business-type health care organizations to prepare which of the following financial statements?

Similar to for-profit entities,under FASB standards,not-for-profit health care entities are required to classify investments into trading,available-for-sale,and held to maturity for reporting purposes.

The format for a not-for-profit health care entity's statement of operations is the same as that for other types of not-for-profits; the FASB requires a different title on the statement since most revenues are derived from user charges.

Similar to other not-for-profit entities,health care entities are required under FASB standards to report program and support functional expenses.

Which of the following could be included in the performance indicator measure provided by a nongovernmental not-for-profit hospital?

Which of the following is not a financial statement prepared by nongovernmental not-for-profit health care entities?

In accounting for health care entities,the account Provision for Bad Debts should be reported as a contra-revenue,rather than as an expense.

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

An annual contributor to a nongovernmental not-for-profit hospital made an unrestricted pledge in October 2016 that will be paid in March 2017.Assuming the hospital's fiscal year-end is December 31,2016,the pledge should be credited to:

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

Principles of Accounting and Financial Reporting for State and Local Governments

Governmental Operating Statement Accounts Budgetary Accounting

Accounting for Governmental Operating Activitiesillustrative Transactions and Financial Statements

Accounting for General Capital Assets and Capital Projects

Accounting for General Long-Term Liabilities and Debt Service

Accounting for the Business-Type Activities of State and Local Governments

Accounting for Fiduciary Activitiesagency and Trust Funds

Financial Reporting of State and Local Governments

Analysis of Governmental Financial Performance

Auditing of Governmental and Not-For-Profit Organizations

Budgeting and Performance Measurement

Accounting for Not-For-Profit Organizations

Not-For-Profit Organizationsregulatory, Taxation, and Performance Issues

Accounting for Colleges and Universities

Accounting and Reporting for the Federal Government Glossary

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Exam 16: Accounting for Health Care Organizations

The GASB and the FASB provide the same criteria for recognizing and reporting services donated to a health care entity.

Describe what prepaid health care plans are and some of the related accounting issues.

The primary source of revenue for most hospitals is:

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

Assets limited as to use are unrestricted assets whose use is limited by parties other than donors or grantors.

Contrast the statement of cash flows that nongovernmental not-for-profit hospitals prepare to those that governmental hospitals prepare.

Both the FASB and the GASB would require that a contribution received for the construction of a future medical facility be reported as an investing activity on the statement of cash flows.

How would the cash acquisition of equipment be reported on a health care entity's statement of cash flows?

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

The GASB requires business-type health care organizations to prepare which of the following financial statements?

Similar to for-profit entities,under FASB standards,not-for-profit health care entities are required to classify investments into trading,available-for-sale,and held to maturity for reporting purposes.

The format for a not-for-profit health care entity's statement of operations is the same as that for other types of not-for-profits; the FASB requires a different title on the statement since most revenues are derived from user charges.

Similar to other not-for-profit entities,health care entities are required under FASB standards to report program and support functional expenses.

Which of the following could be included in the performance indicator measure provided by a nongovernmental not-for-profit hospital?

Which of the following is not a financial statement prepared by nongovernmental not-for-profit health care entities?

In accounting for health care entities,the account Provision for Bad Debts should be reported as a contra-revenue,rather than as an expense.

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

An annual contributor to a nongovernmental not-for-profit hospital made an unrestricted pledge in October 2016 that will be paid in March 2017.Assuming the hospital's fiscal year-end is December 31,2016,the pledge should be credited to:

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

Principles of Accounting and Financial Reporting for State and Local Governments

Governmental Operating Statement Accounts Budgetary Accounting

Accounting for Governmental Operating Activitiesillustrative Transactions and Financial Statements

Accounting for General Capital Assets and Capital Projects

Accounting for General Long-Term Liabilities and Debt Service

Accounting for the Business-Type Activities of State and Local Governments

Accounting for Fiduciary Activitiesagency and Trust Funds

Financial Reporting of State and Local Governments

Analysis of Governmental Financial Performance

Auditing of Governmental and Not-For-Profit Organizations

Budgeting and Performance Measurement

Accounting for Not-For-Profit Organizations

Not-For-Profit Organizationsregulatory, Taxation, and Performance Issues

Accounting for Colleges and Universities

Accounting and Reporting for the Federal Government Glossary

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