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Question(s) / Instruction(s):

     21.     A not-for-profit hospital receives a $150,000 donation that must be used for a specific research project. The hospital anticipates that it will undertake the project next year. How should the hospital report the donation?
          a.     as unrestricted support
          b.     as temporarily restricted support
          c.     as assets limited as to use
          d.     as permanently restricted support

     22.     A not-for-profit hospital receives a $25,000 donation that must be used for a special training program for nurses. When the donated resources are used for the intended purpose, in which net asset classification should the hospital report the expense?
          a.     assets limited as to use
          b.     temporarily restricted net assets
          c.     unrestricted net assets
          d.     permanently restricted net assets


     23.     A governmental hospital receives notice of a $100,000 grant from the federal government to conduct heart and lung research. The grant contains an eligibility requirement; that is, the hospital must incur costs and submit quarterly reports of allowable costs incurred. The reports are subject to audit. When should the hospital recognize revenues under the grant?
          a.     upon receiving notice of the grant
          b.     each quarter, when it submits quarterly reports
          c.     as it incurs allowable costs
          d.     after the all cost reports have been audited


     24.     In the statement of operations of a not-for-profit hospital, which of the following increases in net assets is not likely to appear as part of "unrestricted revenues, gains and other support"?
          a.     net patient service revenue
          b.     premium revenue under capitation agreements
          c.     net assets released from restrictions used for operations
          d.     net assets released from restrictions used for purchase of equipment

 


     

     25.     A governmental hospital receives a $25,000 donation that must be used only for a special nurse training program. How should the hospital account for the revenues and training expenses in its fund accounting records?
          a.     Record the donation as an increase in fund balance of a Specific Purpose Fund; as expenses are incurred, record a fund balance transfer to the General Fund, and recognize revenue and expense in the General Fund.
          b.     Record the donation as restricted revenue of a Specific Purpose Fund; as expenses are incurred, "release" the resources to the General Fund, where expenses are recorded.
          c.     Record the entire transaction in the General Fund; recognizing revenue at the time of the donation and expense as expenses are incurred.
          d.     Record the entire transaction in the General Fund; recognize deferred revenue at the time of the donation, and recognize revenue and expense as expenses are incurred.

     26.     In the statement of operations of a not-for-profit hospital, which of the following is not likely to be a factor in determining "excess of revenues over expenses"?
          a.     net patient service revenue
          b.     extraordinary loss from extinguishment of debt
          c.     investment income
          d.     provision for bad debts


     27.     Which of the following is a major difference between a not-for-profit hospital's statement of operations and statement of changes in net assets?
          a.     contributions are not reported in the statement of operations, but are reported in the statement of changes in net assets.
          b.     net assets released from restrictions are not reported in the statement of operations, but are reported in the statement of changes in net assets.
          c.     the statement of operations does not cover changes in both unrestricted and restricted net assets, but the statement of changes in net assets does cover changes in both unrestricted and restricted net assets.
          d.     the statement of operations is not prepared on the cash basis of accounting, but the statement of changes in net assets is prepared on the cash basis of accounting.

 

 

 

     
     28.     A group of retired registered nurses decide to volunteer their services to a not-for-profit hospital. They perform a variety of tasks, including: (a) filling in for regular nurses when they are out sick; (b) helping out in food preparation; and (c) selling in the hospital gift shop. For which of the three tasks must donated revenues and expenses be recognized?
          a.     only task (a)
          b.     only tasks (a) and (b)
          c.     all three tasks
          d.     none of the three tasks


     29.     Which of the following statements about the form and content of a governmental hospital's statement of revenues, expenses, and changes in net assets is false?
          a.     nonoperating revenues and expenses are shown separately from operating revenues and expenses.
          b.     capital contributions and endowment contributions are shown separately from operating revenues.
          c.     the statement covers both unrestricted and restricted funds.
          d.     the provision for bad debts is deducted from gross patient service revenue to determine the amount reported as net patient service revenue.


     30.     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


     31.     Which of the following is reported as an expense by hospitals?
          a.     charity care
          b.     bad debts
          c.     contractual adjustments
          d.     volunteer and employee discounts

 

 


     
     32.     A not-for-profit hospital will prepare a statement of operations pertaining to the hospital's
                         unrestricted     restricted
                         net assets     net assets
          a.               yes     yes
          b.               no     no
          c.               no     yes
          d.               yes     no


     33.     Which of the following describes the proper structure of a statement of cash flows prepared by a not-for-profit hospital?
          a.     4 classifications of cash flows; indirect method
          b.     3 classifications of cash flows: direct method
          c.     4 classifications of cash flows; direct method
          d.     3 classifications of cash flows; indirect method

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