Question

Select the best answer.
1. A not-for-profit hospital pays $150,000 interest on its bonds outstanding. The bonds were issued to finance construction of a new hospital wing. In its statement of cash flow, the interest should be shown as a cash outflow from
a. noncapital financing activities
b. capital financing activities
c. operating activities
d. investing activities

2. A government hospital pays $150,000 in interest on its bonds outstanding. The bonds were issued to finance construction of a new hospital wing. In its statement of cash flows, the interest should be shown as a cash outflow attributable to
a. noncapital financing activities
b. capital financing activities
c. operating activities
d. investing activities

3. A not-for-profit voluntary health and welfare organization should report a contribution for the construction of a new building as cash flows for which of the following in the statement of cash flows?
a. Capital financing activities
b. Operating activities
c. Financing activities
d. Investing activities

4. During the current year, a voluntary health and welfare organization receives $400,000 in unrestricted pledges.Ofthisamount,$150,000hasbeendesignated by donors for use next year to support operations in the pharmacy. If 20 percent of the unrestricted pledges are expected to be uncollectible, what amount of unrestricted support should the organizations recognize in its current-year financial statements?
a. $400,000
b. $350,000
c. $250,000
d. $200,000

5. Unrestricted earnings on specific purpose fund investments that are part of a hospital's central operations are reported as
a. General fund unrestricted revenues
b. General fund deferred revenues
c. Specific purpose fund restricted revenues
d. Specific purpose fund unrestricted revenues

6. Percy's community hospital would ordinarily include proceeds from the sale of balloons in the gift shop in
a. Other revenues
b. Ancillary service revenues
c. Deductions from gift shop expenses
d. Patient service revenues

7. Hannah, an auditor, is performing a routine review of a not-for-profit hospital and noted the following account balances in the statement of operations for the
fiscal year ending Sept. 30, 2013:
Gross patient service revenue from all services at the hospital's established billing rate $2,225,000
Bad debts $45,000
Contractual adjustments 210,000
Calculate the amount the hospital would report as net patient service revenue in its statement of operations for the fiscal year ending Sept. 30, 2013.
a. $2,040,000
b. $2,070,000
c. $2,015,000
d. $1,970,000

8. Other revenue sources of a hospital would normally include which of the following?
Revenue from grants, specified by the donor
Revenue from a for research parking garage
a. No No
b. No Yes
c. Yes No
d. Yes Yes

9. Based upon Saint Michael Hospital's established billing rate structure, the hospital would have earned patient service revenue of $8,500,000 for the year. However, Saint Michael does not expect to collect this amount because of charity care provided in the amount of $1,000,000 and contractual allowances to third-party payers of $750,000. How much should Saint Michael record as patient service revenue for the year?
a. $8,500,000
b. $7,750,000
c. $7,500,000
d. $6,750,000

10. The BSK Health care foundation donated $900,000 as a permanent endowment to a Senior Citizens health and welfare organization during the year. The foundation stipulated that the income and investment appreciation be used to maintain its preventive care center for the elderly. The endowment principal had an investment appreciation of $60,000 and investment income of $80,000. The organization spent $70,000 to maintain its preventive care center during the year. What is the amount of change in temporarily restricted net assets that the organization should report?
a. $70,000
b. $80,000
c. $140,000
d. $970,000



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  • CreatedAugust 13, 2014
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