Exam 12: Accounting for Hospitals and Other Health Care Providers

With respect to health care organizations private sector not-for-profits health care entities must disclose expenses by functional classifications.

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

The difference between accounting for private-not-for profit hospitals and government owned hospitals is:

The AICPA Audits of Health Care Organizations applies to:

The University of Texas in-state tuition and fees for the semester amount to $4,300. Joe Smith was working as a graduate assistant in the College of Psychology which waived $4,120 of the tuition. What accounts should be debited when recording the collection of this money?

A donor contributed $1,000,000 to a not-for-profit hospital with the restriction that the funds be invested indefinitely and the income be used for cancer research. Which of the following would be true?

Voluntary health and welfare organizations raise a significant amount or nearly all of their resources from contributions and grants and are subject to the rules of the Not-for-Profit Guide.

If a clinic raises a significant amount or nearly all their resources from voluntary contributions or grants, then they are subject to the guidance in the:

Investor owned health care organizations have the following equity section accounts:

The AICPA Health Care Guide does not specifically exclude which of the following from the determination of the performance indicator in the Statement of Operations?

The AICPA Health Care Guide applies to investor-owned, private not-for-profit and government-owned hospitals.

According to The Audit and Accounting Guide which of the following should NOT be include in the determination of a performance indicator for a health care organization?

Private sector not-for-profits health care entities must disclose expenses by functional classifications.

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

For hospitals, contractual adjustments to 3^rd party payers, such as insurance companies, are recorded with a debit to Contractual Adjustment expense and a credit to accounts receivable.

Assume you are reviewing the financial statements of a not-for-profit hospital. Where would you find the account "Assets whose is limited" and how is it used?

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.

Government hospitals are typically considered special purpose entities engaged in governmental and business-type activities under GASB 34.

Which of the following is true regarding accounting and financial reporting for not-for-profit health care organizations?

Private sector, not-for-profit hospital received a gift of $1,000,000 from a donor who indicated that the gift was to be "split" between the hospital and the donor's beneficiary. Specifically, this gift instrument provided that the hospital is to receive $50,000 per year for the next ten years, with the remainder going to the beneficiary. The gift is known as a charitable lead trust, from the point of view of the hospital. The gift was received in 2009, with the first payment to the hospital due in 2010. In 2009, the hospital would record revenue in the amount of: