31. Differences between a hospital's established rates and amounts negotiated with third-party payers are referred to as:
a. contractual adjustments
b. unrecovered costs
c. equity adjustments
d. restricted revenues
32. Which of the following is reported as an expense by not-for-profit hospitals?
a. charity care
b. bad debts
c. contractual adjustments
d. volunteer and employee discounts
33. The accounting and financial reporting procedures for which fund category apply to governmental hospitals?
a. governmental type funds
b. proprietary type funds
c. fiduciary type funds
d. restricted type funds
34 A not-for-profit hospital, the Ruth Clark Hospital established a fund-raising Foundation at the beginning of its calendar year. By the end of the year, the Foundation had raised $750,000 in cash—$600,000 of which was restricted by donors to acquire a new building and $150,000 of which was unrestricted. How should the Ruth Clark Hospital report its interest in the Hospital Foundation and the contributions it received at the end of the first year?
a. as cash of $900,000, other revenues (or gains) – unrestricted of $150,000, and other revenues (or gains) – temporarily restricted of $750,000
b. as interest in hospital foundation of $900,000, other revenues (or gains) – unrestricted of $150,000, and other revenues (or gains) – temporarily restricted of $750,000
c. it should not report the contributions: the Hospital Foundation is a separate entity
d. as cash of $900,00, unrestricted net assets of $150,000, and temporarily restricted net assets of $600,000
35. What if Ruth Clark Hospital (Question 34) is a governmental hospital. How would the Ruth Clark Hospital report its interest in the Hospital Foundation and the contributions it received at the end of the first year?
a. there is no difference in reporting fund-raising foundations between not-for-profit and governmental hospitals
b. as cash of $900,000, unrestricted net position of $150,000, and restricted net position of $600,000
c. it should present the Foundation as a discretely presented component unit (in a separate column) if the GASB standards for reporting it are met
d. as interest in hospital foundation of $900,000 and contributions of $900,000, with net position separately displaying unrestricted from restricted contributions
36. When a not-for-profit hospital uses funds for internal record-keeping purposes, what types of resources are accounted for in the General Funds?
a. all resources used in normal daily operations except for plant resources
b. all resources except for those in funds that are classified as restricted
c. all resources except for assets whose use is limited
d. all resources except for those in funds that are classified as restricted and assets whose use is limited
37. When a hospital uses funds for internal record-keeping purposes, Specific Purpose Funds are those that are:
a. limited as to use by hospital trustees to specific purposes
b. restricted by donors or grantors to specific operating purposes
c. restricted by donors or grantors to specific operating or capital purposes
d. restricted by any legal agreement, such as a bond agreement or a trust arrangement
38. When a hospital uses funds for internal record-keeping purposes, Plant Replacement and Expansion Funds are used to report:
a. resources contributed by outsiders that can only be used to replace or expand the hospital’s existing physical plant
b. resources contributed by outsiders and those designated by the hospital’s governing board that can only be used to replace or expand the hospital’s existing physical plant
c. capital asset expenditures
d. resources restricted by any legal agreement, such as a bond agreement or a trust arrangement
39. The Monks Veterinary Hospital receives $1.5 million from the Clementine Foundation. Only the earnings from investing the contribution may be used by the Hospital to conduct research on feline leukemia. Assuming the Hospital uses fund accounting for internal purposes, which funds should be used to report (1) the assets and (2) any investment earnings?
original investment
contributionearnings
a.endowment fundendowment fund
b.general fundspecific purpose fund
c.specific purpose fundgeneral fund
d.endowment fundspecific purpose fund
40. A not-for-profit hospital will prepare a statement of operations pertaining to the hospital's
unrestrictedrestricted
net assetsnet assets
a.yesyes
b.nono
c.noyes
d.yesno