Question 1

Differences between actual and estimated contractual adjustments require restatement of prior periods.

Accepted Answer

A) True 
 B)False  False

Question 2

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

Accepted Answer

A) True 
 B)False  True

Question 3

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

Accepted Answer

A)  Unrestricted, temporarily restricted, and permanently restricted. 
B)  Paid in capital and retained earnings. 
C)  Invested in capital net of related debt, restricted, and unrestricted. 
D)  Operating, investing, financing. 
A)  Unrestricted, temporarily restricted, and permanently restricted. 
B)  Paid in capital and retained earnings. 
C)  Invested in capital net of related debt, restricted, and unrestricted. 
D)  Operating, investing, financing. A

Question 4

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?

Accepted Answer

A)  The hospital would record revenue in the amount of $1,000,000, increasing temporarily restricted net assets. 
B)  The hospital would record revenue in an amount equal to the present value of the 10 payments to the granddaughter. 
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. 
D)  The hospital would not record revenue for 10 years; then a revenue would be recorded, increasing unrestricted net assets. 
A)  The hospital would record revenue in the amount of $1,000,000, increasing temporarily restricted net assets. 
B)  The hospital would record revenue in an amount equal to the present value of the 10 payments to the granddaughter. 
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. 
D)  The hospital would not record revenue for 10 years; then a revenue would be recorded, increasing unrestricted net assets.

Question 5

The AICPA Health Care Guide prescribes a separate Statement of Operations and Statement of Changes in Net Assets rather than a Statement of Activities.

Accepted Answer

A) True 
 B)False

Question 6

According to The AICPA Health Care Guide,Transfers among affiliated organizations should not be included in the determination of a performance indicator for a health care organization.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is not true regarding financial reporting of health care entities?

Accepted Answer

A)  It is important to distinguish operating revenues and expenses from nonoperating. 
B)  It is important to distinguish between current and noncurrent assets and liabilities. 
C)  Private sector organizations use a three-category format for the Statement of Cash Flows, and public sector organizations us a four-category format. 
D)  Private sector organizations use accrual accounting, while public sector organizations use modified accrual. 
A)  It is important to distinguish operating revenues and expenses from nonoperating. 
B)  It is important to distinguish between current and noncurrent assets and liabilities. 
C)  Private sector organizations use a three-category format for the Statement of Cash Flows, and public sector organizations us a four-category format. 
D)  Private sector organizations use accrual accounting, while public sector organizations use modified accrual.

Question 8

If a health care organization is owned or controlled by a government,it is typically considered a special-purpose entity engaged only in business-type activities and would use governmental fund accounting.

Accepted Answer

A) True 
 B)False

Question 9

The AICPA Health Care Guide provides accounting and reporting requirements that override GASB and FASB standards,but apply only to health care providers.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is not correct with respect to reporting of patient service revenue for health care organizations?

Accepted Answer

A)  Patient service revenue must be reported net of estimated adjustments for contractual adjustments 
B)  Changes to estimates of contractual adjustments related to prior periods must be reported as a prior period adjustment if material 
C)  Patient service revenue does not include amounts representing charity care 
D)  Unrestricted bequests and investment income for current unrestricted purposes may be reported as either operating or nonoperatiang revenue, depending on the policy of the entity 
A)  Patient service revenue must be reported net of estimated adjustments for contractual adjustments 
B)  Changes to estimates of contractual adjustments related to prior periods must be reported as a prior period adjustment if material 
C)  Patient service revenue does not include amounts representing charity care 
D)  Unrestricted bequests and investment income for current unrestricted purposes may be reported as either operating or nonoperatiang revenue, depending on the policy of the entity

Question 11

The cash flow statements of private health care organizations,both not-for-profit and for-profit,may use the direct or indirect method.

Accepted Answer

A) True 
 B)False

Question 12

The statement reflecting revenues,expenses,and other changes in unrestricted net assets for a private sector,not-for-profit hospital is called the:

Accepted Answer

A)  Statement of Changes in Unrestricted Net Assets. 
B)  Statement of Operations. 
C)  Statement of Activities. 
D)  Income Statement. 
A)  Statement of Changes in Unrestricted Net Assets. 
B)  Statement of Operations. 
C)  Statement of Activities. 
D)  Income Statement.

Question 13

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:

Accepted Answer

A)  2013. 
B)  2014. 
C)  When the funds are expended. 
D)  Either 2013 or 2014, depending on the policy of the hospital. 
A)  2013. 
B)  2014. 
C)  When the funds are expended. 
D)  Either 2013 or 2014, depending on the policy of the hospital.

Question 14

Health care organizations that are privately owned and operated to provide a return to investors report the same net asset classifications as private not-for-profit health care organizations.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following could be recognized as contributed services revenue by a not-for-profit hospital?

Accepted Answer

A)  An architect developed building plans for a new outpatient clinic. 
B)  A high school student class volunteered to answer the telephone during the Friday night midnight shift. 
C)  Both (a) and (b) above. 
D)  Neither (a) nor (b) above. 
A)  An architect developed building plans for a new outpatient clinic. 
B)  A high school student class volunteered to answer the telephone during the Friday night midnight shift. 
C)  Both (a) and (b) above. 
D)  Neither (a) nor (b) above.

Question 16

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

Accepted Answer

A)  Private sector, not-for-profit hospitals. 
B)  Public sector, government-owned hospitals. 
C)  Both (a) and (b) above. 
D)  Neither (a) nor (b) above. 
A)  Private sector, not-for-profit hospitals. 
B)  Public sector, government-owned hospitals. 
C)  Both (a) and (b) above. 
D)  Neither (a) nor (b) above.

Question 17

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?

Accepted Answer

A)  The gift would be recorded as an increase in permanently restricted net assets. 
B)  The income from the endowment would be recorded as an increase in temporarily restricted net assets. 
C)  Both (a) and (b) above. 
D)  Neither (a) nor (b) above. 
A)  The gift would be recorded as an increase in permanently restricted net assets. 
B)  The income from the endowment would be recorded as an increase in temporarily restricted net assets. 
C)  Both (a) and (b) above. 
D)  Neither (a) nor (b) above.

Question 18

For hospitals,contractual adjustments to 3rd party payers,such as insurance companies,are recorded with a debit to Contractual Adjustment expense and a credit to Accounts Receivable.

Accepted Answer

A) True 
 B)False

Question 19

Private-sector health care organizations use the three-category FASB format for the Statement of Cash flows,while public sector organizations use the four-category GASB format

Accepted Answer

A) True 
 B)False

Question 20

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

Accepted Answer

A)  Fiduciary, Proprietary, and General. 
B)  Nonspendable, Committed, Restricted and Assigned. 
C)  Permanently Restricted, Temporarily Restricted, and Unrestricted. 
D)  Invested in Capital Assets Net of Related Debt, Restricted, and Unrestricted. 
A)  Fiduciary, Proprietary, and General. 
B)  Nonspendable, Committed, Restricted and Assigned. 
C)  Permanently Restricted, Temporarily Restricted, and Unrestricted. 
D)  Invested in Capital Assets Net of Related Debt, Restricted, and Unrestricted.

Differences between actual and estimated contractual adjustments require restatement of prior periods.

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

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

The AICPA Health Care Guide prescribes a separate Statement of Operations and Statement of Changes in Net Assets rather than a Statement of Activities.

According to The AICPA Health Care Guide,Transfers among affiliated organizations should not be included in the determination of a performance indicator for a health care organization.

Which of the following is not true regarding financial reporting of health care entities?

If a health care organization is owned or controlled by a government,it is typically considered a special-purpose entity engaged only in business-type activities and would use governmental fund accounting.

The AICPA Health Care Guide provides accounting and reporting requirements that override GASB and FASB standards,but apply only to health care providers.

Which of the following is not correct with respect to reporting of patient service revenue for health care organizations?

The cash flow statements of private health care organizations,both not-for-profit and for-profit,may use the direct or indirect method.

The statement reflecting revenues,expenses,and other changes in unrestricted net assets for a private sector,not-for-profit hospital is called the:

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:

Health care organizations that are privately owned and operated to provide a return to investors report the same net asset classifications as private not-for-profit health care organizations.

Which of the following could be recognized as contributed services revenue by a not-for-profit hospital?

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

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?

For hospitals,contractual adjustments to 3^rd party payers,such as insurance companies,are recorded with a debit to Contractual Adjustment expense and a credit to Accounts Receivable.

Private-sector health care organizations use the three-category FASB format for the Statement of Cash flows,while public sector organizations use the four-category GASB format

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

Introduction to Accounting and Financial Reporting for Governmental and Not-For-Profit Organizations

Overview of Financial Reporting for State and Local Governments

Modified Accrual Accounting: Including the Role of Fund Balances and Budgetary Authority

Accounting for the General and Special Revenue Funds

Accounting for Other Governmental Fund Types: Capital Projects, Debt Service, and Permanent

Proprietary Funds

Fiduciary Trustfunds

Government-Wide Statements, Capital Assets, Long-Term Debt

Accounting for Special-Purpose Entities, Including Public Colleges and Universities

Accounting for Private Not-For-Profit Organizations

College and University Accounting Private Institutions

Auditing, Tax-Exempt Organizations, and Evaluating Performance

Financial Reporting by the Federal Government

Filters

Exam 12: Accounting for Hospitals and Other Health Care Providers

Differences between actual and estimated contractual adjustments require restatement of prior periods.

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

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

The AICPA Health Care Guide prescribes a separate Statement of Operations and Statement of Changes in Net Assets rather than a Statement of Activities.

According to The AICPA Health Care Guide,Transfers among affiliated organizations should not be included in the determination of a performance indicator for a health care organization.

Which of the following is not true regarding financial reporting of health care entities?

If a health care organization is owned or controlled by a government,it is typically considered a special-purpose entity engaged only in business-type activities and would use governmental fund accounting.

The AICPA Health Care Guide provides accounting and reporting requirements that override GASB and FASB standards,but apply only to health care providers.

Which of the following is not correct with respect to reporting of patient service revenue for health care organizations?

The cash flow statements of private health care organizations,both not-for-profit and for-profit,may use the direct or indirect method.

The statement reflecting revenues,expenses,and other changes in unrestricted net assets for a private sector,not-for-profit hospital is called the:

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:

Health care organizations that are privately owned and operated to provide a return to investors report the same net asset classifications as private not-for-profit health care organizations.

Which of the following could be recognized as contributed services revenue by a not-for-profit hospital?

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

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?

For hospitals,contractual adjustments to 3rd party payers,such as insurance companies,are recorded with a debit to Contractual Adjustment expense and a credit to Accounts Receivable.

Private-sector health care organizations use the three-category FASB format for the Statement of Cash flows,while public sector organizations use the four-category GASB format

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

Introduction to Accounting and Financial Reporting for Governmental and Not-For-Profit Organizations

Overview of Financial Reporting for State and Local Governments

Modified Accrual Accounting: Including the Role of Fund Balances and Budgetary Authority

Accounting for the General and Special Revenue Funds

Accounting for Other Governmental Fund Types: Capital Projects, Debt Service, and Permanent

Proprietary Funds

Fiduciary Trustfunds

Government-Wide Statements, Capital Assets, Long-Term Debt

Accounting for Special-Purpose Entities, Including Public Colleges and Universities

Accounting for Private Not-For-Profit Organizations

College and University Accounting Private Institutions

Auditing, Tax-Exempt Organizations, and Evaluating Performance

Financial Reporting by the Federal Government

Filters

For hospitals,contractual adjustments to 3^rd party payers,such as insurance companies,are recorded with a debit to Contractual Adjustment expense and a credit to Accounts Receivable.