Multiple Choice Questions
43.Private not-for-profit health care organizations follow standards set by:
A) GASB.
B) FASB.
C) SEC.
D) All of the above.
44.Health care organizations that are privately owned and operated to provide a return to investors follow which standards:
A) GASB.
B) FASB, including standards specifically for not-for-profits.
C) FASB, excluding standards specifically for not-for-profits.
D) None of the above.
45.The AICPA
Audit and Accounting Guide: Health Care Organizations
applies to:
A) Private not-for-profit health care organizations.
B) Governmentally owned health care organizations.
C) Investor-owned health care organizations.
D) All of the above.
46.The AICPA
Audit and Accounting Guide: Health Care Organizations
provides reporting requirements for all of the following organizations
except:
A)The University of Virginia Hospital, a government-owned hospital.
B)A psychiatrist operating as a limited liability corporation.
C)A nursing home operated by the LutheranChurch.
D)Voluntary health and welfare organizations
47.The AICPA
Audit and Accounting Guide: Health Care Organizations
applies to:
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.
48.The equity section of the Statement of Net Position of a government-owned hospital may contain which of the following descriptions?
A)Fiduciary, Proprietary, and General.
B)Nonspendable, Committed, Restricted and Assigned.
C)Permanently Restricted, Temporarily Restricted, and Unrestricted.
D)Net Investment in Capital Assets, Restricted, and Unrestricted Net Position.
49.The equity section of the Statement of Net Assets of a private not-for-profit hospital may contain which of the following descriptions?
A)Fiduciary, Proprietary, and General.
B)Nonspendable, Committed, Restricted and Assigned.
C)Permanently Restricted, Temporarily Restricted, and Unrestricted.
D)Net Investment in Capital Assets, Restricted, and Unrestricted Net Position.
50.Which of the following is
not
correct with respect to reporting of patient service revenue for health care organizations?
A)Patient service revenue must be reported net of estimated adjustments for contractual adjustments.
B)Patient service revenue does not include amounts representing charity care.
C)Changes to estimates of contractual adjustments related to prior periods must be reported as a prior period adjustment if material.
D)Unrestricted bequests and investment income for current unrestricted purposes may be reported as either operating or nonoperating revenue, depending on the policy of the entity.
51.Which of the following is correct with respect to the recording of charity care for health care organizations?
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
B)Charity care is recorded as revenue and an adjustment is recorded for the difference between the value of the revenue and expenses incurred in providing health care services.
C)The value of foregone charity care revenue is deducted as a charitable contribution expense in the Statement of Operations
D)Management’s policy for providing charity care and the level of charity care provided is an optional disclosure
52.St. David’s is a not-for-profit business-oriented hospital. What is the journal entry for the following transaction: During the month, gross patient service revenue amounted to $93,000 of which $82,000 was received in cash. Contractual adjustments to third-party payers amounted to $10,000 (actual, not estimated).
A)Cash82,000
Patient Accounts Receivable 11,000
Operating Revenues – Unrestricted - Patient Service Revenue 93,000
Contractual Adjustments – Unrestricted 10,000
Patient Accounts receivable 10,000
B)Cash82,000
Patient Accounts Receivable 11,000
Operating Revenues – Patient Service Revenue, Restricted 93,000
Bad Debts Expense – Restricted 10,000
Patient Accounts receivable 10,000
C)Cash82,000
Patient Accounts Receivable 11,000
Operating Revenues – Unrestricted - Patient Service Revenue 93,000
Operating Revenues-Unrestricted patient Service Revenue 10,000
Patient Accounts receivable 10,000
D)Cash82,000
Patient Accounts Receivable 1,000
Operating Revenues – Unrestricted - Patient Service Revenue 83,000