63.Which of the following is true regarding the reporting of expenses by private sector, not-for-profit hospitals?
A)All expenses are considered reductions in unrestricted net assets.
B)Expenses must be reported by natural (i.e. salaries, supplies, etc.) classification in the statements.
C)Both (a) and (b) above.
D)Neither (a) nor (b) above.
64.Not-for-profit health care entities are distinguished from voluntary health and welfare organizations in the following manner:
A)Health care organizations provide health care services while voluntary health and welfare organizations do not.
B)Health care organizations use accrual accounting whereas voluntary health and welfare organizations do not.
C)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.
D)Health care organizations do not provide services to individuals who are unable to pay.
65.Which of the following health care organizations must follow standards established by the Governmental Accounting Standards Board?
A)Private not-for-profit hospitals.
B)Government owed hospitals.
C)Both (a) and (b) above.
D)Neither (a) nor (b)above.
66.Which of the following health care organizations have “CategoryB” GAAP established by the AICPA's Audit and Accounting Guide:
Health Care Organizations?
A)Cook County Hospital, a department of Cook County.
B)Kishwaukee Hospital, a nongovernmental, not-for-profit hospital.
C)Open Door Urgent Care, a privately owned for-profit organization.
D)All of the above.
67.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?
A)Other revenue, such as parking lot or cafeteria revenue.
B)Net assets released from restrictions for operating purposes.
C)Both (a) and (b) above.
D)Neither (a) nor (b) above.
68.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?
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.
69.Which of the following is true regarding accounting and financial reporting for not-for-profit health care organizations?
A)Charity care is reported as operating revenue at the normal and customary rate and bad debt expense is reported for an equal amount.
B)Contractual adjustments with insurance companies are reported as a reduction in patient service revenue.
C)Both (a) and (b) above.
D)Neither (a) nor (b) above.
70.A donor pledged $500,000 to a not-for-profit hospital in 2014 to conduct medical research, conditional on the hospital raising $500,000 from other donors. The other donors met the condition in 2015. The donor transferred the funds to the hospital in 2015. In which year would the revenue be recognized?
A)2014.
B)2015.
C)Half in 2014 and half in 2015.
D)None of the above; the hospital would only recognize revenue when the amounts had been expended according to the donor's wishes.
71.Which of the following could be recognized as contributed services revenue by a not-for-profit hospital?
A)A high school student class volunteered to answer the telephone during the Friday night midnight shift.
B)An architect developed building plans for a new outpatient clinic.
C)Both (a) and (b) above.
D)Neither (a) nor (b) above.
72.Which of the following is
nottrue regarding accounting and financial reporting for private not-for-profit hospitals?
A)Expenses may be unrestricted or temporarily restricted depending on donor intent.
B)Fund accounting is not required.
C)The Statement of Cash Flows may use either the direct or indirect method.
D)Net assets are classified as Unrestricted, Temporarily Restricted or Permanently Restricted.