Question 1

$520,000 of the $2,720,000 was expected to be uncollectible.
Required:
Prepare the necessary journal entry to record the anticipated uncollectible amount.

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Question 2

For not-for-profit entities, what is the difference in identification of "control" between a merger and an acquisition?

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Question 3

What is the main source of financial support for most voluntary health and welfare entities?

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Question 4

The hospital estimated that contractual adjustments would reduce the amount collected from third-party payors to $1,710,000.
Required:
Prepare the necessary journal entry to record the contractual adjustments.

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Question 5

What term is often used by voluntary health and welfare entities as a category for resources received from contributions, as opposed to those from providing goods or services?

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Question 6

How does a not-for-profit entity account for: 1) cash contributions, and 2) donated goods that are received for operating purposes? What types of revenues are recognized by voluntary health and welfare entities?

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Question 7

Dura Foundation, a voluntary health and welfare entity dedicated to finding medical cures and supported by contributions from the general public, included the following costs in its Statement of Functional Expenses for the year ended December 31, 2018:
 
-What should Dura Foundation report as supporting service expenses?

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Question 8

What are third party payors? Why are their interests important in accounting for health care entities?

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Question 9

For May 2018, Carlington Hospital's charges for patient services were $608,000, of which 80% was billed to third-party payors.
Required:
Prepare the journal entry to accrue patient charges for the month.

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Question 10

Dura Foundation, a voluntary health and welfare entity dedicated to finding medical cures and supported by contributions from the general public, included the following costs in its Statement of Functional Expenses for the year ended December 31, 2018:
 
-What should Dura Foundation report as program service expenses?

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Question 11

How does a recipient not-for-profit entity record the receipt of a gift that will be transferred without restriction to another charitable entity? What if the donor retains the right to revoke or redirect the gift?

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Question 12

In this month, there were several patients that had no health insurance and due to their low income level, the hospital decided that $85,000 of receivables would not be collectible.
Required:
Prepare the necessary journal entry to reflect the decision to consider the $85,000 as charity care.

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Question 13

What criteria must be met before a not-for-profit entity can recognize contributed services as a means of support?

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Question 14

Prepare the necessary journal entry to record the revenue and receivables.

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Question 15

During 2017, the Garfield Humane Society, a voluntary health and welfare entity, received cash donations of $892,000 and membership dues of $62,000.A member of the Humane Society donated services valued at $8,000 that would otherwise have been performed by a paid staff member.A pet food manufacturer donated dog food valued at $16,400.The Humane Society received a gift of $140,000, to be used in building a new animal shelter.Also during 2017, investments held by the Humane Society earned interest of $2,000.
Required:
Prepare a schedule showing the amount that the Garfield Humane Society should have recorded for contributions from public support for 2017.

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Question 16

For a not-for-profit entity, what are supporting services expenses?

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Question 17

What two classifications are used for the expenses incurred by voluntary health and welfare entities?

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Question 18

What financial statements would normally be prepared by a voluntary health and welfare entity?

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Question 19

What are the objectives of accounting for a not-for-profit entity?

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Question 20

For a not-for-profit entity, when is recognition of contributions of artworks and historical treasures not required?

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Quiz 18: Accounting for Not-For-Profit Entities

$520,000 of the $2,720,000 was expected to be uncollectible. Required: Prepare the necessary journal entry to record the anticipated uncollectible amount.