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Exam 12: Accounting for Hospitals and Other Health Care Providers

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Question 61

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For accounting purposes, health care organizations include HMOs and individual medical practitioners, as well as hospitals.

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Question 62

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As both the FASB and the GASB approved the AICPA Health Care Guide, its requirements constitute Category B GAAP and must be followed by all health care organizations.

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Question 63

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The AICPA Audit and Accounting Guide: Health Care Organizations applies to:

Health care entities may be private, not-for-profit, governmental, or for-profit. All are subject to the AICPA Health Care Guide and FASB statements 116 and 117.

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?

Health care organizations that are privately owned and operated to provide a return to investors follow FASB standards excluding those standards specifically for not-for-profits.

Which of the following is not a required statement of a private not-for-profit hospital?

The Audit and Accounting Guide identifies items that should not be included in the determination of operating income for a health care organization. Which of the following is not one of those items?

The AICPA Health Care Guide prescribes a separate Statement of Operations and Statement of Changes in Net Assets rather than a Statement of Activities.

The cash flow statements of health care organizations, both private and government-owned, may use the direct or indirect method.

While governmental health care organizations follow GASB standards, they typically report as special-purpose entities engaged only in business-type activities.

Health care organizations that are privately owned and operated to provide a return to investors report the same net asset classifications as private not-for-profit health care organizations.

According to The AICPA Health Care Guide, transfers among affiliated organizations should not be included in the determination of a performance indicator for a health care organization.

With respect to governmental health care entities, both GASB and AICPA require presentation of a performance indicator.

For hospitals, contractual adjustments to 3^rd party payers, such as insurance companies, are recorded with a debit to Contractual Adjustment expense and a credit to Accounts Receivable.

Health care entities may be private not-for-profit, governmental, or for-profit. All, however, are subject to the AICPA Health Care Guide, which is accepted by both FASB and GASB as being Category B GAAP.

Which of the following is NOT TRUE with respect to governmental health care entities?

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