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Exam 12: Accounting for Hospitals and Other Health Care Providers

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Question 51

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Dukes Medical Center performed charity care at a cost of $5,000 and a standard charge of $11,000.How much should Dukes recognize as revenue?

A) $11,000.
B) $6,000.
C) $5,000.
D) $0.

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Question 52

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Private sector not-for-profits health care entities must disclose expenses by functional classifications.

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Question 53

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The AICPA Health Care Guide provides accounting and reporting requirements that override GASB and FASB standards,but apply only to health care providers.

The difference between the financial statements of private not-for profit hospitals and private not-for-profit voluntary health and welfare organizations is:

If a health care organization is owned or controlled by a government,it is typically considered a special-purpose entity engaged only in business-type activities and would use proprietary fund accounting.

What is the basis of accounting for hospitals and other health care organizations and what organizations are responsible for setting Level A GAAP?

Record the following transactions on the books of St.Marie's Hospital,a private not-for-profit hospital. (a)The Hospital billed patients $300,000 for services rendered.Of this amount,3% is expected to be uncollectible.Contractual adjustments with insurance companies are expected to total $42,000. (b)The Hospital received $240,000 in pledges of support in a campaign undertaken to purchase new MMR equipment.All of the pledges are payable within one year and 8% are expected to be uncollectible. (c)Charity care in the amount of $34,000 (at standard charges)was performed on an indigent patient. (d)The Hospital collected $237,600 for the services performed in (1)above.Actual contractual adjustments for these services amounted to $45,700.The remaining receivables were written off as uncollectible.

Like charities and private colleges,private not-for-profit health care organizations follow FASB standards.

Private health care organizations follow _____ standards while governmentally owned health care organizations follow _____ standards.

Private for-profit health care organizations follow FASB standards excluding those written specifically for not-for-profits.

The difference between accounting for private not-for profit hospitals and government owned hospitals is:

Health care organizations that are investor owned for-profit organizations follow FASB standards excluding those written specifically for not-for-profits.

The level of charity care should be disclosed in the notes to financial statements.

Private health care organizations,both not-for-profit and for-profit,follow FASB standards while government healthcare organizations follow GASB.

Government hospitals are typically considered special purpose entities engaged in governmental and business-type activities under GASB 34.

Identify income items which should not be included in the determination of the performance indicator by a hospital.

Which of the following is not true regarding accounting and financial reporting for private not-for-profit hospitals?

According to The AICPA Health Care Guide,Transfers among affiliated organizations should be included in the determination of a performance indicator for a health care organization.

Voluntary health and welfare organizations raise a significant amount or nearly all of their resources from contributions and grants and are subject to the rules of the AICPA Not-for-Profit Guide.