Question 1

Which of the following is true regarding the reporting of expenses by private sector,not-for-profit hospitals?

Accepted Answer

A)  All expenses are considered reductions in unrestricted net assets. 
B)  Expenses must be reported by natural (i.e. salaries, supplies, etc.) classification in the statements. 
C)  Both of the above. 
D)  Neither of the above. 
A)  All expenses are considered reductions in unrestricted net assets. 
B)  Expenses must be reported by natural (i.e. salaries, supplies, etc.) classification in the statements. 
C)  Both of the above. 
D)  Neither of the above.

Question 2

Charity care is reported as both revenue and expense (bad debt)in the Statement of Operations.

Accepted Answer

A) True 
 B)False

Question 3

Private sector,not-for-profit health care organizations have a category of assets called "Assets Whose Use is Limited." That category refers to:

Accepted Answer

A)  Assets that have been restricted by donor action. 
B)  Unrestricted assets that have been limited by individuals or entities other than contributors (such as by bond covenants). 
C)  Both of the above. 
D)  Neither of the above. 
A)  Assets that have been restricted by donor action. 
B)  Unrestricted assets that have been limited by individuals or entities other than contributors (such as by bond covenants). 
C)  Both of the above. 
D)  Neither of the above.

Question 4

Private not-for-profit health care organizations include what categories in the equity section of the Statement of Net Assets?

Accepted Answer

A)  Unrestricted, temporarily restricted, and permanently restricted. 
B)  Paid in capital and retained earnings. 
C)  Invested in capital net of related debt, restricted, and unrestricted. 
D)  Operating, investing, financing. 
A)  Unrestricted, temporarily restricted, and permanently restricted. 
B)  Paid in capital and retained earnings. 
C)  Invested in capital net of related debt, restricted, and unrestricted. 
D)  Operating, investing, financing.

Question 5

A donor pledged $500,000 to a not-for-profit hospital in 2011 to conduct medical research,conditional on the hospital raising $500,000 from other donors.The other donors met the condition in 2012.The donor transferred the funds to the hospital in 2012.In which year would the revenue be recognized?

Accepted Answer

A)  2011. 
B)  2012. 
C)  Half in 2011 and half in 2012. 
D)  None of the above; the hospital would only recognize revenue when the amounts had been expended according to the donor's wishes. 
A)  2011. 
B)  2012. 
C)  Half in 2011 and half in 2012. 
D)  None of the above; the hospital would only recognize revenue when the amounts had been expended according to the donor's wishes.

Question 6

Sam Smith died,leaving a will that provided that $1,000,000 be transferred to a not-for-profit hospital.The hospital is to invest the funds for 10 years and give $40,000 each year to the granddaughter.At the end of the 10 years,the $1,000,000 can be used for any purpose desired by the hospital.Which of the following is true?

Accepted Answer

A)  The hospital would record revenue in the amount of $1,000,000, increasing temporarily restricted net assets. 
B)  The hospital would record revenue in an amount equal to the present value of the 10 payments to the granddaughter. 
C)  The hospital would record revenue in an amount equal to the $1,000,000 less the present value of the 10 payments to the granddaughter. 
D)  The hospital would not record revenue for 10 years; then a revenue would be recorded, increasing unrestricted net assets. 
A)  The hospital would record revenue in the amount of $1,000,000, increasing temporarily restricted net assets. 
B)  The hospital would record revenue in an amount equal to the present value of the 10 payments to the granddaughter. 
C)  The hospital would record revenue in an amount equal to the $1,000,000 less the present value of the 10 payments to the granddaughter. 
D)  The hospital would not record revenue for 10 years; then a revenue would be recorded, increasing unrestricted net assets.

Question 7

Government owned hospitals follow FASB Statements 116 and 117.

Accepted Answer

A) True 
 B)False

Question 8

Both commercial and private sector not-for-profit hospitals and health care providers follow FASB Statements 116 and 117.

Accepted Answer

A) True 
 B)False

Question 9

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?

Accepted Answer

A)  The gift would be recorded as an increase in permanently restricted net assets. 
B)  The income from the endowment would be recorded as an increase in unrestricted net assets. 
C)  Both of the above. 
D)  Neither of the above. 
A)  The gift would be recorded as an increase in permanently restricted net assets. 
B)  The income from the endowment would be recorded as an increase in unrestricted net assets. 
C)  Both of the above. 
D)  Neither of the above.

Question 10

Which of the following could be recognized as contributed services revenue by a not-for-profit hospital?

Accepted Answer

A)  An architect developed building plans for a new outpatient clinic. 
B)  A high school student class volunteered to answer the telephone during the midnight shift, once per week. 
C)  Both of the above. 
D)  Neither of the above. 
A)  An architect developed building plans for a new outpatient clinic. 
B)  A high school student class volunteered to answer the telephone during the midnight shift, once per week. 
C)  Both of the above. 
D)  Neither of the above.

Question 11

With respect to health care organizations,assets that have limited use are temporarily restricted on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 12

Not-for-profit business-oriented organizations use modified accrual accounting.

Accepted Answer

A) True 
 B)False

Question 13

The AICPA Audits of Health Care Organizations applies to:

Accepted Answer

A)  Private sector, not-for-profit hospitals. 
B)  Private sector, for-profit hospitals. 
C)  Both of the above. 
D)  Neither of the above. 
A)  Private sector, not-for-profit hospitals. 
B)  Private sector, for-profit hospitals. 
C)  Both of the above. 
D)  Neither of the above.

Question 14

A private sector,not-for-profit hospital received a pledge of $100,000 in 2011,with no purpose restriction.The pledge card indicated that the funds were to be used in 2012.Cash was turned over to the hospital in 2012.The not-for-profit hospital would recognize contribution revenue in:

Accepted Answer

A)  2011. 
B)  2012. 
C)  When the funds are expended. 
D)  Either 2011 or 2012, depending on the policy of the hospital. 
A)  2011. 
B)  2012. 
C)  When the funds are expended. 
D)  Either 2011 or 2012, depending on the policy of the hospital.

Question 15

Which of the following is true regarding the financial statements of a private sector nonprofit hospital?

Accepted Answer

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

Question 16

Because they are engaged in business-type activities,governmental health care organizations use the accrual basis and economic resources measurement focus.

Accepted Answer

A) True 
 B)False

Question 17

For accounting purposes,health care organizations include HMOs and individual medical practitioners,as well as hospitals.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is not correct with respect to reporting of patient service revenue for health care organizations?

Accepted Answer

A)  Patient service revenue must be reported net of estimated adjustments for contractual adjustments 
B)  Contractual adjustments must be reported as a prior period adjustment if material 
C)  Patient service revenue does not include charity care 
D)  Unrestricted bequests and investment income for current unrestricted purposes may be reported as either operating or nonoperatiang revenue, depending on the policy of the entity 
A)  Patient service revenue must be reported net of estimated adjustments for contractual adjustments 
B)  Contractual adjustments must be reported as a prior period adjustment if material 
C)  Patient service revenue does not include charity care 
D)  Unrestricted bequests and investment income for current unrestricted purposes may be reported as either operating or nonoperatiang revenue, depending on the policy of the entity

Question 19

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

Accepted Answer

A)  A contra-revenue. 
B)  A bad debt expense. 
C)  Contractual allowance expense. 
D)  None of the above. 
A)  A contra-revenue. 
B)  A bad debt expense. 
C)  Contractual allowance expense. 
D)  None of the above.

Question 20

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

Accepted Answer

A)  Charity care is reported as operating revenue. 
B)  Contractual adjustments with insurance companies are reported as an operating expense. 
C)  Both of the above. 
D)  Neither of the above. 
A)  Charity care is reported as operating revenue. 
B)  Contractual adjustments with insurance companies are reported as an operating expense. 
C)  Both of the above. 
D)  Neither of the above.

Which of the following is true regarding the reporting of expenses by private sector,not-for-profit hospitals?

Charity care is reported as both revenue and expense (bad debt)in the Statement of Operations.

Private sector,not-for-profit health care organizations have a category of assets called "Assets Whose Use is Limited." That category refers to:

Private not-for-profit health care organizations include what categories in the equity section of the Statement of Net Assets?

A donor pledged $500,000 to a not-for-profit hospital in 2011 to conduct medical research,conditional on the hospital raising $500,000 from other donors.The other donors met the condition in 2012.The donor transferred the funds to the hospital in 2012.In which year would the revenue be recognized?

Government owned hospitals follow FASB Statements 116 and 117.

Both commercial and private sector not-for-profit hospitals and health care providers follow FASB Statements 116 and 117.

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?

Which of the following could be recognized as contributed services revenue by a not-for-profit hospital?

With respect to health care organizations,assets that have limited use are temporarily restricted on the balance sheet.

Not-for-profit business-oriented organizations use modified accrual accounting.

The AICPA Audits of Health Care Organizations applies to:

A private sector,not-for-profit hospital received a pledge of $100,000 in 2011,with no purpose restriction.The pledge card indicated that the funds were to be used in 2012.Cash was turned over to the hospital in 2012.The not-for-profit hospital would recognize contribution revenue in:

Which of the following is true regarding the financial statements of a private sector nonprofit hospital?

Because they are engaged in business-type activities,governmental health care organizations use the accrual basis and economic resources measurement focus.

For accounting purposes,health care organizations include HMOs and individual medical practitioners,as well as hospitals.

Which of the following is not correct with respect to reporting of patient service revenue for health care organizations?

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

Which of the following is true regarding accounting and financial reporting for not-for-profit 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

Advanced Topics for State and Local Governments

Accounting for Private Not-For-Profit Organizations

College and University Accounting

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 the reporting of expenses by private sector,not-for-profit hospitals?

Charity care is reported as both revenue and expense (bad debt)in the Statement of Operations.

Private sector,not-for-profit health care organizations have a category of assets called "Assets Whose Use is Limited." That category refers to:

Private not-for-profit health care organizations include what categories in the equity section of the Statement of Net Assets?

A donor pledged $500,000 to a not-for-profit hospital in 2011 to conduct medical research,conditional on the hospital raising $500,000 from other donors.The other donors met the condition in 2012.The donor transferred the funds to the hospital in 2012.In which year would the revenue be recognized?

Government owned hospitals follow FASB Statements 116 and 117.

Both commercial and private sector not-for-profit hospitals and health care providers follow FASB Statements 116 and 117.

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?

Which of the following could be recognized as contributed services revenue by a not-for-profit hospital?

With respect to health care organizations,assets that have limited use are temporarily restricted on the balance sheet.

Not-for-profit business-oriented organizations use modified accrual accounting.

The AICPA Audits of Health Care Organizations applies to:

A private sector,not-for-profit hospital received a pledge of $100,000 in 2011,with no purpose restriction.The pledge card indicated that the funds were to be used in 2012.Cash was turned over to the hospital in 2012.The not-for-profit hospital would recognize contribution revenue in:

Which of the following is true regarding the financial statements of a private sector nonprofit hospital?

Because they are engaged in business-type activities,governmental health care organizations use the accrual basis and economic resources measurement focus.

For accounting purposes,health care organizations include HMOs and individual medical practitioners,as well as hospitals.

Which of the following is not correct with respect to reporting of patient service revenue for health care organizations?

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

Which of the following is true regarding accounting and financial reporting for not-for-profit 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

Advanced Topics for State and Local Governments

Accounting for Private Not-For-Profit Organizations

College and University Accounting

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: