Exam 18: Accounting and Reporting for Private Not-For-Profit Organizations

What are third party payors? Why are their interests important in accounting for health care entities?

Give several examples of voluntary health and welfare organizations.

The Yelton Center is a voluntary health and welfare organization. During 2010, unrestricted pledges of $780,000 were received by the center, sixty percent of which were payable in 2010, with the remainder payable in 2011 (for use in 2011). Officials estimated that fifteen percent of these pledges will be uncollectible. Required: How much should the Yelton Center report as revenue for 2010?

Which entry would be the correct entry to record that a not-for-profit organization collected $80,000 of amounts pledged and wrote off $3,000 of amounts pledged as amounts uncollectible?

Which of the following is not a question individuals ask of not-for-profit organizations in considering whether to make a contribution?

The following gifts are received in Year One by a not-for-profit organization: I. $2,000 specified by the donor to be used to pay salaries. II. $10,000 for new conference room furniture. III. $5,000 to be held for one year before being expended. The salaries are paid in Year Two and the conference room furniture is purchased in Year One. -How are investments in equity securities with readily determinable market values and their related unrealized gains and losses reported by a not-for-profit organization?

A not-for-profit organization provides the following information for the year: Unrestricted pledges received this year, due within 12 months \ 125,000 Contributions to the endowment received 20,000 Percentage of unrestricted pledges expected to be received: 90\% Collections of pledges before the end of the year 75,000 Pledges written off at year-end 3,000 Required: Prepare the journal entries for these transactions.

Wakefield Home is a private not-for-profit healthcare organization offering services for a fee. In the first quarter of 2011, Wakefield Home rendered services of $300,000 to patients. Of this amount 75% will be paid by patients, and $25,000 will be adjusted based on estimated insurance agreements. The remaining amount is to be paid by third party insurance providers. -Record the journal entries that reflect all of this information.

How does a recipient not-for-profit organization record the receipt of a gift that will be transferred without restriction to another charitable organization? What if the donor retains the right to revoke or redirect the gift?

Which one of the following is a voluntary health and welfare organization?

Wakefield Home is a private not-for-profit healthcare organization offering services for a fee. In the first quarter of 2011, Wakefield Home rendered services of $300,000 to patients. Of this amount 75% will be paid by patients, and $25,000 will be adjusted based on estimated insurance agreements. The remaining amount is to be paid by third party insurance providers. -Wakefield Home is a private not-for-profit healthcare organization offering services for a fee. The home has an endowment and the income may be used to sponsor families that are unable to pay for services but the principal must be preserved. In addition, various fundraising activities take place during the year. When the Home held its annual Holiday fund raiser, pledges of $50,000 were received. The administration expected 5% to be uncollectible. In addition, income of $10,000 was received from the endowment to sponsor families. Prepare the journal entries for these transactions.

Wakefield Home is a private not-for-profit healthcare organization offering services for a fee. In the first quarter of 2011, Wakefield Home rendered services of $300,000 to patients. Of this amount 75% will be paid by patients, and $25,000 will be adjusted based on estimated insurance agreements. The remaining amount is to be paid by third party insurance providers. -The Home incurred the following liabilities: $110,000 salaries, $30,000 medical equipment, $10,000 utilities expense. Prepare the journal entries for these transactions.

Historically, what was the pattern of reporting of not-for-profit organizations? (1) Patterned after for-profit accounting (2) Emphasis on separate fund types (3) Disregard for the entire entity

For the month of December 2011, patient charges at Northfield Hospital (a not-for-profit hospital) were $2,720,000. Third-party payors were billed $1,800,000. -Prepare the necessary journal entry to record the revenue and receivables.

What are the three categories of net assets required by GAAP in reporting a not-for-profit organization?

Which one of the following financial statements is not required by GAAP regarding a voluntary health and welfare organization?

Which entry would be the correct entry on the donor's books when the donor relinquishes control of an asset that it contributes to a not-for-profit organization? DEBIT CREDIT A) Expense-charitable contribution Cash B) Refundable advance to charity Cash C) Charitable pledge Cash D) Cash Liability to beneficiary E) Cash Refundable advance

What two classifications are used for the expenses incurred by voluntary health and welfare organizations?

What is the appropriate account to debit when reducing net patient service revenue as a result of arrangements with third party payors?

The following gifts are received in Year One by a not-for-profit organization: I. $2,000 specified by the donor to be used to pay salaries. II. $10,000 for new conference room furniture. III. $5,000 to be held for one year before being expended. The salaries are paid in Year Two and the conference room furniture is purchased in Year One. -How much should be reclassified on the Statement of Activities in Year Two from the Temporarily Restricted column to the Unrestricted column?