Net assets are defined as total assets minus

Current assets

Noncurrent assets

Total liabilities

Net assets with donor restrictions

1 point

2.

Question 2

True or False: The purpose of the statement of changes in net assets is to explain any changes in the asset section of the balance sheet from one year to the next.

True

False

1 point

3.

Question 3

Which of the following items would be reported in the net asset section of the balance sheet for a not-for-profit healthcare organization?

Assets limited as to use

Current assets

Noncurrent assets

Net assets with donor restrictions

1 point

4.

Question 4

Which of the following activities would result in a change in a not-for-profit healthcare organization's unrestricted net assets?

Receipt of a donation for building a new physician office building

Receipt of a donation for the organization's endowment fund

Receipt of revenues earned in the provision of patient care

Investment loss on the organization's endowment fund

1 point

5.

Question 5

Mercy Hospital's December 31, 2022, balance sheet reported unrestricted net assets of $45,500. Their 2022 change in unrestricted net assets was $2,500. How much did the hospital report in unrestricted net assets as of January 1, 2022?

$43,000

$45,500

$48,000

Cannot be computed based on the information provided

1 point

6.

Question 6

In December 2022, Mercy Hospital received a donation to be used at the discretion of the hospital in support of general operations. Assume that the entire gift was received in cash and that no additional expenses occurred related to the gift. What impact would this gift have on the hospital's statement of operations for the year 2022?

Higher operating income

Lower operating income

Higher excess of revenues over expenses

Lower excess of revenues over expenses

1 point

7.

Question 7

True or false: A contribution received by a not-for-profit organization for its endowment fund is classified as a net asset without donor restrictions.

False

True

1 point

8.

Question 8

How will a not-for-profit organization's net assets change when assets are released from donor restrictions?

Unrestricted net assets increase and net assets with donor restrictions decrease

Unrestricted net assets increase and net assets with donor restrictions increase

Unrestricted net assets decrease and net assets with donor restrictions decrease

Unrestricted net assets decrease and net assets with donor restrictions increase

1 point