Multiple Choice
Select the best answer for each of the following items:
1. Depreciation should be recognized in the financial statements of
(a) Private sector proprietary (for profit) hospitals only.
(b) Both private sector proprietary (for profit) hospitals and not-for-profit hospitals.
(c) Both private sector proprietary (for profit) hospitals and not-for-profit hospitals, only when they are affiliated with a university.
(d) All private sector hospitals, as a memorandum entry not affecting the statement of revenue and expenses.
2. Securities donated to a nonbusiness organization should be recorded at the
(a) Donor’s recorded amount.
(b) Fair market value at the date of the gift.
(c) Fair market value at the date of the gift or the donor’s recorded value, whichever is lower.
(d) Fair market value at the date of the gift or the donor’s recorded value, whichever is higher.
3. The Charity Services ledger account of a nonprofit hospital is a(an)
(a) Contra-asset account.
(b) Expense account.
(c) Contra-revenue account.
(d) Loss account.
4. The restricted groupings recommended for hospitals do not include
(a) Specific purpose funds.
(b) Endowment funds.
(c) Plant funds.
(d) Plant replacement and expansion funds.