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48 Cards in this Set
- Front
- Back
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1. Private not-for-profit health care organizations follow standards set by:
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B) FASB.
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2. Health care organizations that are privately owned and operated to provide a return to investors follow which standards:
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B) FASB, excluding standards specifically for not-for-profits.
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3. The AICPA Audit and Accounting Guide: Health Care Organizations applies to:
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D) All of the above.
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4. The AICPA Audit and Accounting Guide: Health Care Organizations provides reporting requirements for all of the following organizations except:
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D) voluntary health and welfare organizations
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5. The AICPA Audit and Accounting Guide: Health Care Organizations applies to:
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C) Both (a) and (b) above.
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6. The equity section of the Statement of Net Assets of a government-owned hospital may contain which of the following descriptions?
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D) Net Assets Invested in Capital Assets Net of Related Debt, Restricted, and Unrestricted.
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7. The equity section of the Statement of Net Assets of a private not-for-profit hospital may contain which of the following descriptions?
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C) Permanently Restricted, Temporarily Restricted, and Unrestricted.
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8. Which of the following is not correct with respect to reporting of patient service revenue for health care organizations?
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B) Changes to estimates of contractual adjustments related to prior periods must be reported as a prior period adjustment if material
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9. Which of the following is correct with respect to the recording of charity care for health care organizations?
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A) Revenues are not recorded for the value of charity care services provided, but related expenses are included with other expenses on the Statement of Operations
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12. Which of the following is not a required statement of a private not-for-profit hospital?
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B) Statement of Functional Expense.
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13. Which of the following is not true regarding financial reporting of health care entities?
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D) Private sector organizations use accrual accounting, while public sector organizations use modified accrual.
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14. Private sector, not-for-profit health care organizations have a category of assets called “Assets Whose Use is Limited.” That category refers to:
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B)Unrestricted assets that have been limited by individuals or entities other than contributors (such as by bond covenants).
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15. The statement reflecting revenues, expenses, and other changes in unrestricted net assets for a private sector, not-for-profit hospital is called the:
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B) Statement of Operations.
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16. Which of the following is true regarding the financial statements of a private sector not-for-profit hospital?
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D) All of the above are true.
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17. Which of the following is true regarding revenue recognition for health care organizations?
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A) Patient service revenue is reported net of contractual adjustments.
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18. A private sector not-for-profit hospital received a gift of $250,000 cash on the first day of 2014 with a donor restriction that the resources be used to purchase certain equipment. The equipment was purchased on the same day and is expected to last five years with no salvage value. The Statement of Financial Position as of December 31, 2014 would reflect as net assets of:
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C) Either (a) or (b), depending on the policy of the hospital.
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19. A private sector, not-for-profit hospital received a pledge of $100,000 in 2013, with no purpose restriction. The pledge card indicated that the funds were to be used in 2014. Cash was turned over to the hospital in 2014. The not-for-profit hospital would recognize contribution revenue in:
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A) 2013.
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20. A private sector, not-for-profit hospital received a pledge of $150,000 in 2013 to be used for a building to be constructed in 2014 but contingent on the hospital being able to raise an equivalent amount from other donors. As of the end of 2013, half the amount had been raised from other donors. In 2014, the hospital raised the amount from other donors. The donor gave the $150,000 to the hospital in 2014 and the building was completed in 2014. In which year should the hospital recognize the $150,000 from the pledge?
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B) 2014.
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21. Which of the following is true regarding the reporting of expenses by private sector, not-for-profit hospitals?
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A) All expenses are considered reductions in unrestricted net assets.
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22. Not-for-profit health care entities are distinguished from voluntary health and welfare organizations in the following manner:
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D) Health care organizations are considered to be primarily business-oriented whereas voluntary health and welfare organizations raise a significant portion of their money from voluntary contributions.
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23. Which of the following health care organizations must follow standards established by the Governmental Accounting Standards Board?
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B) Government owed hospitals.
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24. Which of the following health care organizations have “ Category B” GAAP established by the AICPA's Audit and Accounting Guide: Health Care Organizations?
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C)Both (a) and (b) above.
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25. A “performance indicator” is required in the Statement of Operations for health care entities. Which of the following must be reported below that performance indicator?
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D) Neither (a) nor (b) above.
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26. 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?
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C) Both (a) and (b) above.
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27. Which of the following is true regarding accounting and financial reporting for not-for-profit health care organizations?
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B) Contractual adjustments with insurance companies are reported as a reduction in patient service revenue.
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28. A donor pledged $500,000 to a not-for-profit hospital in 2013 to conduct medical research, conditional on the hospital raising $500,000 from other donors. The other donors met the condition in 2014. The donor transferred the funds to the hospital in 2014. In which year would the revenue be recognized?
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B) 2014.
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29. Sam Smith died, leaving a will that provided that $1,000,000 be transferred to a not-for-profit hospital. The hospital is to invest the funds for 10 years and give $40,000 each year to the granddaughter. At the end of the 10 years, the $1,000,000 can be used for any purpose desired by the hospital. Which of the following is true?
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C) The hospital would record revenue in an amount equal to the $1,000,000 less the present value of the 10 payments to the granddaughter.
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30. Which of the following could be recognized as contributed services revenue by a not-for-profit hospital?
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A) An architect developed building plans for a new outpatient clinic.
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31. Which of the following is not true regarding accounting and financial reporting for private not-for-profit hospitals?
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A) Expenses may be unrestricted or temporarily restricted depending on donor intent.
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32. Which of the following is true regarding revenue recognition for health care organizations?
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D) All of the above are true.
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33. Which of the following is a required statement for a governmental hospital?
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D) Statement of Cash Flows.
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34. A hospital reported the following uncollectible amounts:$ 10,000 for services rendered to homeless individuals with no intention of collection.$ 30,000 for services rendered with the expectation of collection, but which proved to be uncollectible.What amount should be reported in revenues and bad debt expense for these items?
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C) Revenues: $ 30,000; Bad Debt Expense: 30,000.
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35. The difference between accounting for private not-for-profit hospitals and government- owned hospitals is:
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C) The equity accounts have different titles and definitions.
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36. The difference between the financial statements of private not-for-profit hospitals and private not-for-profit voluntary health and welfare organizations is:
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A) Hospitals do not have to prepare a Statement of Functional Expense.
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37. Private health care organizations follow _____ standards while governmentally owned health care organizations follow _____ standards.
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B) FASB; GASB.
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38. A private not-for-profit entity estimated its Allowance for Contractual Adjustment. During the next year, the hospital found that the actual total of contractual adjustments applied to receivables on hand at the end of the previous year was $ 5,000 higher than the estimate. How should the difference be reported?
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A)The hospital should reduce current period net patient service revenues for the $5,000.
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39. Private not-for-profit health care organizations include what categories in the equity section of the Statement of Net Assets?
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A) Unrestricted, temporarily restricted, and permanently restricted.
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40. According to the AICPA Audit and Accounting Guide: Health Care Organizations, which of the following items should not be included in the determination of the performance indicator?
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C) Both (a) and (b) above.
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41. Which of the following is false regarding revenues of health care organizations:
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C) Patient service revenue includes charge for charity care.
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42. 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?
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D) $ 0
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43. If a clinic raises a significant amount or nearly all their resources from voluntary contributions or grants, they are subject to the guidance in the AICPA:
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A) Not-for-Profit Guide.
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44. When accounting for health care organizations, services provided for charity care are:
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B) Not recorded as revenues and the costs are expensed as normal.
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45. Contractual allowances for amounts billed to 3rd parties are treated as:
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C) A contra-revenue.
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46. Which of the following is
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are true with respect to health care organizations?/C) Private sector not-for-profits health care entities must disclose expenses by functional classifications.
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47. According to AICPA Health Care Guide, which of the following should not be included in the determination of a performance indicator for a health care organization?
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C) Both (a) and (b) above.
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48. 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:
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C) Assets whose use is limited.
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49. Investor owned health care organizations have the following equity section accounts:
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A) Paid in capital and retained earnings.
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50. During the month of December, Godiva Hospital billed patients $45,000, billed 3rd parties $65,000, and provided $10,000 of charity care. How much should Godiva report as Accounts Receivable?
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B) $110,000.
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