Exam 12: Accounting for Hospitals and Other Health Care Providers

Both governmental owned and private health care providers use the modified accrual basis of accounting and the economic resources measurement focus.

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.

The AICPA Health Care Guide provides additional guidance regarding accounting and reporting requirements for voluntary health and welfare organizations.

Not-for-profit health care entities are distinguished from voluntary health and welfare organizations in the following manner:

St. Mary's Medical Center performed charity care at a cost supplies etc. of $21,000. The standard charge to patients for these services is $63,000. How much should the hospital recognize as revenue?

Which of the following health care organizations have "Category B" GAAP established by the AICPA's Audit and Accounting Guide: Health Care Organizations?

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

The level of charity care is included in revenue and should be disclosed in the notes to financial statements.

Private sector not-for-profit health care entities must disclose expenses by their functional classifications program and supporting in the notes, if not provided in the Statement of Operations.

It is the policy of St. David's Hospital, a not-for-profit business oriented hospital, is to record all gifts, bequests, and investment income as Nonoperating Income. Nonoperating revenues related to undesignated resources amounted during the year is as follows: 25,000 in unrestricted gifts and bequests, $18,000 in unrestricted income on endowment investments and $3,800 from income on investments other than endowment. What is the correct journal entry to record this event?

When accounting for health care organizations, services provided for charity care are:

The equity section of the Statement of Net Assets of a private not-for-profit hospital may contain which of the following descriptions?

Private sector not-for-profit health care entities must disclose expenses by functional classifications, if not provided in the Statement of Operations.

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

The equity section of governmentally-owned hospitals includes net investment in capital assets, restricted, and unrestricted net position.

St. Mary's Hospital is a not-for-profit business oriented hospital. During the year, premium revenue from capitation agreements amounted to $220,000, all of which was received in cash. Other Operating revenues, also collected in cash, are: $5,300 from the gift shop, $7,160 from parking lot fees, $3,700 from cafeteria operations and $29,300 from tuition. What is the appropriate journal entry to record this event? A) Cash 245,460 \nobreakspace\nobreakspace\nobreakspace Operating revenues-Unrestricted-Premium Revenue 200,000 \nobreakspace\nobreakspace\nobreakspace Operating revenues-Unrestricted-Other Revenue 45,460 B) Cash 245,460 \nobreakspace\nobreakspace\nobreakspace Operating revenues-Unrestricted-Premium Revenue 200,000 \nobreakspace\nobreakspace\nobreakspace Operating revenues-Restricted-Other Revenue 45,460 C) Cash 245,460 \nobreakspace\nobreakspace\nobreakspace Operating revenues-Unrestricted-Premium Revenue 200,000 \nobreakspace\nobreakspace\nobreakspace Operating revenues-Unrestricted-Other Revenue 16,160 \nobreakspace\nobreakspace\nobreakspace Operating revenues-Restricted-Other Revenue 29,300 D) Cash 245,460 \nobreakspace\nobreakspace\nobreakspace Operating revenues-Unrestricted-Premium Revenue 200,000 \nobreakspace\nobreakspace\nobreakspace Non-Operating revenues-Unrestricted-Other Revenue 45,460

While the different types of health care organizations follow different sets of generally accepted accounting standards, the differences lie mainly in presentation. Which of the following statements is accurate?

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?

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

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