Exam 12: Accounting for Hospitals and Other Health Care Providers

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?

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

Identify income items which should not be included in the determination of the performance indicator by a hospital.

Private for-profit health care organizations follow FASB standards excluding those written specifically for not-for-profits.

The AICPA Health Care Guide provides accounting and reporting requirements that override GASB and FASB standards,but apply only to health care providers.

Private health care organizations follow _____ standards while governmentally owned health care organizations follow _____ standards.

If a health care organization is owned or controlled by a government,it is typically considered a special-purpose entity engaged only in business-type activities and would use proprietary fund accounting.

Private health care organizations,both not-for-profit and for-profit,follow FASB standards while government healthcare organizations follow GASB.

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

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 AICPA Not-for-Profit Guide.

Health care organizations that are investor owned for-profit organizations follow FASB standards excluding those written specifically for not-for-profits.

The difference between the financial statements of private not-for profit hospitals and private not-for-profit voluntary health and welfare organizations is:

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

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

Record the following transactions on the books of St.Marie's Hospital,a private not-for-profit hospital. (a)The Hospital billed patients $300,000 for services rendered.Of this amount,3% is expected to be uncollectible.Contractual adjustments with insurance companies are expected to total $42,000. (b)The Hospital received $240,000 in pledges of support in a campaign undertaken to purchase new MMR equipment.All of the pledges are payable within one year and 8% are expected to be uncollectible. (c)Charity care in the amount of $34,000 (at standard charges)was performed on an indigent patient. (d)The Hospital collected $237,600 for the services performed in (1)above.Actual contractual adjustments for these services amounted to $45,700.The remaining receivables were written off as uncollectible.

What is the basis of accounting for hospitals and other health care organizations and what organizations are responsible for setting Level A GAAP?

According to The AICPA Health Care Guide,Transfers among affiliated organizations should be included 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.

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