Question 1

Which of the following statements is true about diagnosis-related groups (DRGs)?

Accepted Answer

A) DRGs are the basis for a cost accounting method that groups costs together by departments performing the services. 
B) A DRG is a case-mix classification scheme that is used to determine the payment provided to the hospital for inpatient services,regardless of how much the hospital spends to treat a patient. 
C) The federal Medicare system of retroactive payment for services depends on DRGs. 
D) The diagnostic-related groups method is the prevailing practice of billing third-party payors for a health care organization's average cost for providing care for locally defined similar medical conditions.

Question 2

An annual contributor to a not-for-profit hospital made an unrestricted pledge in October 2010 that will be paid in March 2011.Assuming the hospital's fiscal year-end is December 31,2010,the pledge in October 2010 should be credited to:

Accepted Answer

A) Contributions-Temporarily Restricted in 2010. 
B) Contributions-Unrestricted in 2010. 
C) Contributions-Temporarily Restricted in 2011. 
D) Contributions-Unrestricted in equal amounts in 2010 and 2011.

Question 3

If the equity/net assets section of the balance sheet (or statement of net assets)is comprised of unrestricted net assets,temporarily restricted net assets,and permanently restricted net assets,then the health care organization is

Accepted Answer

A) Public,governmental. 
B) Private,nongovernmental. 
C) Commercial or proprietary. 
D) Cannot be determined.

Question 4

Under SFAS No.116,pledges received by a nongovernment not-for-profit hospital during its building construction fund drive,and restricted for that purpose,would be recognized as an increase in temporarily restricted net assets (support)

Accepted Answer

A) When the building is constructed. 
B) When the pledge is made. 
C) When the pledge is collected. 
D) During each period of construction using the percentage-of-completion method.

Question 5

The required financial statements for a not-for-profit hospital are a balance sheet,statement of revenues and expenses of the General Fund,a statement of changes in fund balances,and a statement of cash flows of the General Fund.

Accepted Answer

A) True 
 B)False

Question 6

Contractual adjustments that arise from differences between the gross charge for patient services and the amount paid by a third party payor are reported as

Accepted Answer

A) Deductions from gross patient revenue in arriving at net patient revenue. 
B) Disclosures in the notes to the financial statements. 
C) Either deductions from gross patient revenue or disclosure in the notes,depending on the dollar amount of the adjustments relative to billings. 
D) Bad debt expense.

Question 7

Do you agree with the following statement? Why or why not? "The goal of financial and operational analysis for the manager is to determine the creditworthiness of the health care organization."

Accepted Answer

The answer of Do you agree with the following statement?...

Question 8

Which of the following statements is true regarding hospitals?

Accepted Answer

A) Hospital accounting and financial reporting is identical to that used by for-profit businesses. 
B) Hospitals use modified accrual accounting. 
C) Hospitals record revenues based upon full charges and report contractual adjustments as a deduction from revenues. 
D) Hospitals report charity care in the same manner as contractual adjustments.

Question 9

Health care organizations often collaborate and combine with related entities in providing health care services.

Accepted Answer

A) True 
 B)False

Question 10

The net assets or equity section of a health care organization's balance sheet or statement of net assets will indicate whether the health care organization is for-profit,not-for-profit,or governmental.

Accepted Answer

A) True 
 B)False

Question 11

Record in general journal form the following selected transactions for Avalon General Hospital,a nongovernmental,not-for-profit institution.
1)Gross charges for patient services rendered during the period amounted to $7,870,000,of which $350,000 represented charity care for indigent patients.
2)During the year the provision for bad debts was set at $190,000 and contractual adjustments amounted to $435,000.
3)A wealthy donor donated $2,000,000 to construct a new cardiology wing on the hospital.
4)During the year,the new cardiology wing (see item 3)was one-half completed at a cost of $1,000,000.

Accepted Answer

The answer of Record in general journal form the following...

Question 12

What auditing issues are of particular significance to the health care industry?

Accepted Answer

The answer of What auditing issues are of particular significance...

Exam 17: Accounting and Reporting for the Federal Government

Which of the following statements is true about diagnosis-related groups (DRGs) ?

An annual contributor to a not-for-profit hospital made an unrestricted pledge in October 2010 that will be paid in March 2011.Assuming the hospital's fiscal year-end is December 31,2010,the pledge in October 2010 should be credited to:

If the equity/net assets section of the balance sheet (or statement of net assets) is comprised of unrestricted net assets,temporarily restricted net assets,and permanently restricted net assets,then the health care organization is

Under SFAS No.116,pledges received by a nongovernment not-for-profit hospital during its building construction fund drive,and restricted for that purpose,would be recognized as an increase in temporarily restricted net assets (support)

The required financial statements for a not-for-profit hospital are a balance sheet,statement of revenues and expenses of the General Fund,a statement of changes in fund balances,and a statement of cash flows of the General Fund.

Contractual adjustments that arise from differences between the gross charge for patient services and the amount paid by a third party payor are reported as

Do you agree with the following statement? Why or why not? "The goal of financial and operational analysis for the manager is to determine the creditworthiness of the health care organization."

Which of the following statements is true regarding hospitals?

Health care organizations often collaborate and combine with related entities in providing health care services.

The net assets or equity section of a health care organization's balance sheet or statement of net assets will indicate whether the health care organization is for-profit,not-for-profit,or governmental.

What auditing issues are of particular significance to the health care industry?