Answered: not-for-profit hospital performs…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

1. A not-for-profit hospital performs services in the current year at a charge of $1 million. Of this amount, $200,000 is viewed as charity care services because no collection was expected at the time of the work. Additionally, officials expect another $94,000 to be bad debts. What should the hospital report as net patient service revenues?

Select one:

a.$906,000

b.$1,000,000

c.$706,000

d.$800,000

2. In the accounting for health care providers, what are third-party payors?

Select one:

a.Friends and relatives who pay the medical costs of a patient.

b.Doctors who reduce fees for indigent patients.

c.Insurance companies and other groups that pay a significant portion of the medical fees in the United States.

d.Charities that supply medicines to hospitals and other health care providers.

3.What is a contractual adjustment?

Select one:

a.A year-end journal entry to recognize all of a health care entity's remaining receivables.

b.An increase in a patient's charges caused by revisions in the billing process utilized by a health care entity.

c.The results of a cost allocation system that allows a health care entity to determine a patient's cost by department.

d.A reduction in patient service revenues caused by agreements with third-party payors that allows them to pay a health care entity based on their determination of reasonable costs.

4.A local citizen gives a not-for-profit entity a cash donation that is restricted for research activities. The money should be recorded in

Select one:

a.temporarily restricted net assets.

b.unrestricted net assets.

c.deferred revenue.

d.permanently restricted net assets.

5. Eloise Olszyna does volunteer work for a local charity as a community service. She replaces without charge an administrator who would have otherwise been paid $33,000. Which of the following statements is true?

Select one:

a.The charity should recognize a contribution of $33,000 as an increase in unrestricted net assets as well as salary expense of $33,000.

b.The charity should recognize a restricted gain of $33,000.

c.The charity should recognize a reduction in expenses of $33,000.

d.The charity should make no entry.

6.A voluntary health and welfare organization produces a statement of functional expenses. What is the purpose of this statement?

Select one:

a.Separates program service expenses from supporting service expenses.

b.Separates cash expenses from noncash expenses.

c.Separates fixed expenses from variable expenses.

d.Separates current unrestricted and current restricted funds.

7.When a promise is made to a private not-for-profit entity to contribute cash or other assets in the future, that promise is

Select one:

a.always considered to be conditional and should increase assets and liabilities.

b.only recorded if it is expected to be received within the next twelve months.

c.never recorded until the cash or assets are received.

d.known as a pledge and should increase receivables and revenues.

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions