Exam 12: Accounting for Hospitals and Other Health Care Providers

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.

An unrestricted balance sheet category used in health care reporting to show limitations on the use of assets due to bond covenant restrictions and governing board plans for future use is called:

A donor pledged $500,000 to a not-for-profit hospital in 2016 to conduct medical research, conditional on the hospital raising $500,000 from other donors. The other donors met the condition in 2016 The donor transferred the funds to the hospital in 2017. In which year would the revenue be recognized?

Which of the following is false regarding revenues of health care organizations?

The AICPA Audit and Accounting Guide: Health Care Organizations applies to:

Not-for-profit business-oriented health care organizations use accrual accounting.

St. Paul's is a private not-for-profit hospital. At the end of December 2016, a donor pledged to make five payments of $50,000, beginning on January 1, 2017. The contributions are restricted to pay for operations in those years. The present value of these payments is $223,255, discounted at 6%. The contribution was not restricted as to purpose. Record all entries required for 2016 and 2017.

Which of the following health care organizations must follow standards established by the Governmental Accounting Standards Board GASB?

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

Health care organizations that are privately owned and operated to provide a return to investors follow GASB standards.

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

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

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

A hospital reported the following uncollectible amounts: $ 25,000 for services rendered to homeless individuals with no intention of collection. $ 73,000 for services rendered with the expectation of collection, but which proved to be uncollectible. What amount should be reported in revenues and provision for bad debt for these items?

Which of the following is correct with respect to the recording of charity care for health care organizations?

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 Patient Accounts Receivable.

Health care organizations that are privately owned and operated to provide a return to investors follow which standards:

Both public and private sector health care organizations measure transactions and events similarly, but use different equity accounts.

Which of the following is true regarding revenue recognition for health care organizations?

The AICPA Health Care Guide does not require a performance indicator in the financial statements of private sector not-for-profit health care providers.