Question 1

Which of the following is a basic financial statement?&#10;A) Balance Sheet&#10;B) Statement of Operations&#10;C) Statement of Cash Flows&#10;D) All of the above

Accepted Answer

All of the options listed are basic financial statements. The Balance Sheet shows a company's assets, liabilities, and shareholders' equity at a specific point in time. The Statement of Operations, also known as the Income Statement, shows the company's revenues and expenses over a period of time. The Statement of Cash Flows shows the inflows and outflows of cash, indicating how well the company generates cash to pay its debt obligations and fund its operating expenses.

Question 2

Balance Sheet for a non-profit contains all of the following except:&#10;A) Organization's assets&#10;B) Organizations liabilities&#10;C) Stockholders' equity&#10;D) Cash flow

Accepted Answer

Non-profits do not have stockholders' equity; instead, they have net assets.

Question 3

Assets are defined as:&#10;A) Long term debt&#10;B) Cash, investments, inventory and receivables&#10;C) Self-insurance reserves&#10;D) Accrued pension

Accepted Answer

Assets are resources owned by a business from which future economic benefits are expected to flow to the business. This includes cash, investments, inventory, and receivables, among other items.

Question 4

Liabilities are defined as:&#10;A) Financial obligations due within a year&#10;B) Cash and cash equivalents&#10;C) Patient accounts receivable&#10;D) Inventories

Accepted Answer

Liabilities are financial obligations a company owes to outside parties, which can include loans, accounts payable, mortgages, deferred revenues, bonds, warranties, and accrued expenses. Among the options given, only "Financial obligations due within a year" accurately describes a type of liability, specifically current liabilities.

Question 5

Net assets do not include one of the following categories:&#10;A) Unrestricted&#10;B) Belated&#10;C) Temporary&#10;D) Permanent

Accepted Answer

Net assets in financial accounting, particularly for non-profit organizations, are categorized into unrestricted, temporarily restricted, and permanently restricted. The term "belated" is not a category used to classify net assets.

Question 6

A statement of operations summarizes the organization's total assets, liabilities and net assets in what time period?&#10;A) Last day of the accounting period&#10;B) Over a period of time&#10;C) Last quarter&#10;D) Annually

Accepted Answer

A statement of operations summarizes an organization's financial activities over a period of time, not just at a single point in time. It shows how revenues are transformed into net income or net loss, capturing the dynamic nature of an organization's financial performance.

Question 7

Other revenue refers to all of the following except:&#10;A) Salary and wages&#10;B) Appropriations and grants&#10;C) Income from investments&#10;D) Revenue from contributions

Accepted Answer

Other revenue typically includes income sources outside of the primary business operations, such as appropriations and grants, income from investments, and revenue from contributions. Salary and wages, however, are considered expenses rather than revenue.

Question 8

The statement of changes in net assets includes:&#10;A) Account balances&#10;B) Accounting Methods&#10;C) Why there was a change from one year to the next in the entire net asset section of the balance sheet&#10;D) Expense determinations

Accepted Answer

The statement of changes in net assets is designed to provide information on why there was a change from one year to the next in the entire net asset section of the balance sheet. It explains the reasons behind the changes in net assets, rather than detailing account balances, accounting methods, or how expenses are determined.

Question 9

Body of the statement of cash flows does not include:&#10;A) Cash flows from operating activities&#10;B) Cash flows from investing activities&#10;C) Cash flows from financing activities&#10;D) Current liabilities

Accepted Answer

The statement of cash flows includes three main sections: cash flows from operating activities, cash flows from investing activities, and cash flows from financing activities. Current liabilities are not included in the body of the statement of cash flows; instead, they are part of the balance sheet.

Question 10

Cash flows from investing activities includes:&#10;A) Purchase of plant property and equipment&#10;B) Accounts payable&#10;C) Accrued pension&#10;D) Estimated third party payor settlements

Accepted Answer

Cash flows from investing activities include transactions involving the purchase or sale of long-term assets, such as property, plant, and equipment, which is why option A is correct. Options B, C, and D relate to operating activities and liabilities, not investing activities.

Question 11

GAAP requires certain disclosure (footnote) information to give a more clear picture of the financial position.

Accepted Answer

The answer of GAAP requires certain disclosure (footnote) information to...

Question 12

Balance sheet for investor owned entities presents a summary of the entity's assets, liabilities and net assets.

Accepted Answer

The answer of Balance sheet for investor owned entities presents...

Question 13

Assets include accrued pension.

Accepted Answer

The answer of Assets include accrued pension....

Question 14

Liabilities are financial obligations due within a year.

Accepted Answer

The answer of Liabilities are financial obligations due within a...

Question 15

Net assets section of a balance sheet for not for profits is analogous to the owner and equity on a for profit balance sheet.

Accepted Answer

The answer of Net assets section of a balance sheet...

Question 16

Notes to financial statements are called proclamations.

Accepted Answer

The answer of Notes to financial statements are called proclamations....

Question 17

Statement of cash flows discloses key noncash investing and financial transactions.

Accepted Answer

The answer of Statement of cash flows discloses key noncash...

Question 18

Basic Accounting Equation is: assets =liabilities + net assets.

Accepted Answer

The answer of Basic Accounting Equation is: assets =liabilities +...

Question 19

Liquidity refers to long term depth.

Accepted Answer

The answer of Liquidity refers to long term depth....

Question 20

Assets are defined as guaranteed future economic benefits of an organization.

Accepted Answer

The answer of Assets are defined as guaranteed future economic...

Deck 2: Health Care Financial Statements