Question

Select the best answer for each of the following multiple-choice items dealing with health care organizations.
1. Hospital financial resources are required by a bond indenture to be set aside to finance construction of a new pediatrics facility. In which of the following hospital net asset classes should these resources be reported?
a. Permanently restricted
b. Temporarily restricted
c. Unrestricted
d. Refundable deposits
2. During 2018, Trained Hospital received $90,000 in third-party reimbursements for depreciation. These reimbursements were restricted as follows:
For replacement of fully depreciated equipment . .. .. . .. . . . . .. $25,000
For additions to property . . . . .. .... .. . .... .. . . . . . .. . . . . .. 65,000
What amount of these reimbursements should Trained include in revenues for the year ended December 31, 2018?
a. $0
b. $25,000
c. $65,000
d. $90,000
3. A hospital should report earnings from endowment funds that are restricted to a specific operating purpose as
a. Temporarily restricted revenues.
b. Permanently restricted revenues.
c. Unrestricted revenues.
d. Unrestricted revenues when expended.
4. Inventory donated for use in a hospital should be reported as
a. Other operating revenues.
b. Non-operating revenues.
c. An addition to the unrestricted net assets.
d. An addition to the restricted net assets.
5. Dee City’s community hospital, which uses enterprise fund reporting and chooses to follow
FASB guidelines, normally includes proceeds from sale of cafeteria meals in
a. Patient service revenues.
b. Other operating revenues.
c. Ancillary service revenues.
d. Deductions from dietary service expenses.
6. Land valued at $400,000 and subject to a $150,000 mortgage was donated to Beaty Hospital without restriction as to use. Which of the following entries should Beaty make to record this donation?
7. In hospital accounting, restricted net assets are
a. Not available unless the board of directors removes the restrictions.
b. Restricted as to use only for board-designated purposes.
c. Not available for current operating use; however, the income generated by the funds is available for current operating use.
d. Restricted as to use by the donor, grantor, or other source of the resources.
8. Not-for-profit health care organizations are typically sponsored by
a. Community organizations.
b. Religious organizations.
c. Universities.
d. Any of the above.
9. A not-for-profit hospital that follows FASB standards should report investment income from an endowment that is restricted to a specific operating purpose as
a. General fund revenues.
b. Endowment fund revenues.
c. Unrestricted revenues.
d. Temporarily restricted revenues.
10. Board-designated funds are
a. Not available unless the board of directors removes the restrictions.
b. Unrestricted net assets.
c. Not available for current operating use; however, the income earned on the funds is available.
d. Restricted as to use only for board-designated purposes.


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  • CreatedApril 13, 2015
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