Question 1

Under capitation agreements, hospitals:

Accepted Answer

Under capitation agreements, hospitals receive a monthly premium based on the number of participants in an HMO. This means that the hospital is prepaid a fixed amount per patient, regardless of the actual services provided or the cost of those services. The hospital assumes the risk for any costs that exceed the fixed amount.

Question 2

Under the Medicare DRG system, hospitals:

Accepted Answer

Under the Medicare DRG system, hospitals receive fees based upon the patient's diagnosis-related group (DRG). The fee is predetermined and based upon the average cost of treating patients within that DRG. Hospitals are incentivized to provide efficient and effective care in order to control costs and maximize their reimbursement.

Question 3

In a private health care organization, plant replacement and expansion funds account for:

Accepted Answer

Plant replacement and expansion funds are funds set aside specifically for the improvement and expansion of a healthcare organization's physical property and infrastructure. Therefore, it is used for property improvements such as replacement of equipment, renovation of facilities, and expansion of facilities. It is not used for issuance or payment of long-term debt. Hence, the correct answer is A.

Question 4

Currently, which organization has jurisdiction over accounting and reporting standards for private colleges and universities?

Accepted Answer

The Financial Accounting Standards Board (FASB) has jurisdiction over accounting and reporting standards for private colleges and universities. FASB establishes financial accounting and reporting standards for private sector organizations, including private higher education institutions.

Question 5

Which of the following accounts would not typically be found on a health care organization's operating statement if that organization prepares it financial statements using functional presentation?

Accepted Answer

Salaries expense is not typically found on a health care organization's operating statement when using functional presentation because salaries are usually included within the specific functional areas (like nursing services or other professional services) rather than being listed as a separate, general category.

Question 6

What is the basis of accounting used in accounting for not-for-profit health care organizations?

Accepted Answer

Not-for-profit health care organizations typically use the accrual basis of accounting. This method recognizes revenues when they are earned and expenses when they are incurred, regardless of when cash is received or paid. This approach provides a more accurate picture of an organization's financial position and operations.

Question 7

In the Statement of Cash Flow for a private not-for-profit college, endowment contributions are included in cash flows provided by (used for) ____________ activities.

Accepted Answer

Endowment contributions are typically considered financing activities as they represent funds provided to the organization by external financing sources. These contributions are not generated by the operating activities of the college, nor are they related to investments or noncapital financing activities.

Question 8

A hospital's contractual adjustments:

Accepted Answer

A) Contractual adjustments are deducted from gross patient revenues.
B) Contractual adjustments are usually based on predetermined amounts.
C) Contractual adjustments represent the difference between the amounts billed by the hospital and the amounts expected to be collected by the insurance company. Therefore, all of the options are correct, and the best answer is D.

Question 9

Which of the following financial statements is required for the annual financial reports of public colleges and universities?

Accepted Answer

Public colleges and universities, which follow standards set by the Governmental Accounting Standards Board (GASB), are required to prepare a Statement of Revenues, Expenses, and Changes in Net Assets. This statement reflects the institution's financial performance over a period, including its operating and non-operating revenues and expenses.

Question 10

Charity care services provided by a hospital:

Accepted Answer

Charity care services are provided by a hospital as a form of community service and are not expected to generate revenue. Therefore, these services are not reported as revenues in the financial statements of the hospital.

Question 11

Which of the following is a category of health care entity?​

Accepted Answer

All of the above options are categories of health care entities. A proprietary entity is privately owned and aims to generate profits, while a voluntary not-for-profit entity is owned by a nonprofit organization or a community that seeks to provide health care services without any profit motive. A public entity is owned and funded by the government to provide health care services.

Question 12

A private not-for-profit college or university would provide which of the following combinations of financial statements to their users?​

Accepted Answer

Private not-for-profit colleges and universities typically provide a Statement of Activities, a Statement of Financial Position, and a Statement of Cash Flows to their users.

Question 13

A public college or university would provide which of the following combinations of financial statements to their users?

Accepted Answer

Public colleges and universities follow standards similar to those for governmental entities, which include presenting a Statement of Net Assets; Statement of Revenue, Expenses, and Change in Net Assets; and a Statement of Cash Flows. These statements provide a comprehensive view of the financial health and operations of the institution.

Question 14

In the Statement of Cash Flow for a public college or university, endowment contributions are included in cash flows provided by (used for) ____________ activities.

Accepted Answer

Endowment contributions for a public college or university are included in noncapital financing activities in the Statement of Cash Flows, as they are funds provided to support the institution's operations and are not directly related to its capital or investing activities.

Question 15

With the adoption of GASB statement #35 in 1999, governmental health care organizations are required to report their activities in a manner more like a(n):

Accepted Answer

GASB statement #35 requires governmental health care organizations to report their activities like an enterprise fund. An enterprise fund is used for activities that are financed and operated in a manner similar to those of a commercial enterprise. Therefore, reporting as an enterprise fund allows for more accurate reporting of the business-like activities of the health care organization.

Question 16

Carlton (private) University received the following pledges during 2015:
?
a.Jane Baker pledges $30,000 to be used for student scholarships.?
?
b.As a result of a pledge drive, $400,000 is pledged to be paid by the end of the accounting year.Ten percent of pledges in the past have been shown to be uncollectible.These pledges are unrestricted.?
Required:
?
Make the journal entries necessary to record the pledges.

Accepted Answer

The answer of Carlton (private) University received the following pledges...

Question 17

Atlee makes a cash gift to a not-for-profit hospital which is restricted by the donor to buy toys for the pediatric ward.It should be recorded in the:​

Accepted Answer

A specific-purpose fund is used to account for resources that are restricted by donors to a specific purpose or activity, such as Atlee's cash gift to purchase toys for the pediatric ward of the not-for-profit hospital. The general fund is used to record unrestricted resources and day-to-day operations of the government entity. Endowment funds are restricted by donors to be invested, and only the earnings can be spent on a specific purpose. An enterprise fund is used for activities that are primarily financed and operated like a business, which is not applicable in this scenario.

Question 18

In a health care organization, Other Operating Revenue includes:

Accepted Answer

Other Operating Revenue includes any revenue generated by the healthcare organization that is not directly related to patient care, such as revenue from educational programs, rental income from space leased to third parties, and other miscellaneous sources of income. Revenues from outpatient surgery (A), nursing services (C), and radiology services (D) would all fall under patient service revenue, as they directly relate to the care and treatment of patients.

Question 19

Government grants, like Pell Grants, which are essentially pass through financial aid to students are accounted for as

Accepted Answer

Agency transactions are the correct classification for government grants like Pell Grants because these funds are passed through the institution to the student, and the institution acts as an agent rather than the funds being designated for the institution's own use.

Question 20

Southern Coast (private) University received the following pledges during 2014: ?
A)Joy Dance pledges $60,000 to be paid over a three-year period beginning at the end of this year.Southern Coast discounts this contribution at 10%.The present value is $49,737.? ?
B)As a result of a pledge drive, $500,000 is pledged to be paid by the end of the accounting year.Ten percent of pledges in the past have been shown to be uncollectible.? Required:
?
Make the necessary journal entries to record the pledges.

Accepted Answer

The answer of Southern Coast (private) University received the following...

Quiz 19: Accounting for Not-For-Profit Colleges and Universities and Health Care Organizations

Under capitation agreements, hospitals:

Under the Medicare DRG system, hospitals:

In a private health care organization, plant replacement and expansion funds account for:

Currently, which organization has jurisdiction over accounting and reporting standards for private colleges and universities?

Which of the following accounts would not typically be found on a health care organization's operating statement if that organization prepares it financial statements using functional presentation?

What is the basis of accounting used in accounting for not-for-profit health care organizations?

In the Statement of Cash Flow for a private not-for-profit college, endowment contributions are included in cash flows provided by (used for) ____________ activities.

A hospital's contractual adjustments:

Which of the following financial statements is required for the annual financial reports of public colleges and universities?

Charity care services provided by a hospital:

Which of the following is a category of health care entity?

A private not-for-profit college or university would provide which of the following combinations of financial statements to their users?

A public college or university would provide which of the following combinations of financial statements to their users?

In the Statement of Cash Flow for a public college or university, endowment contributions are included in cash flows provided by (used for) ____________ activities.

With the adoption of GASB statement #35 in 1999, governmental health care organizations are required to report their activities in a manner more like a(n) :

Atlee makes a cash gift to a not-for-profit hospital which is restricted by the donor to buy toys for the pediatric ward.It should be recorded in the:

In a health care organization, Other Operating Revenue includes:

Government grants, like Pell Grants, which are essentially pass through financial aid to students are accounted for as

Quiz 19: Accounting for Not-For-Profit Colleges and Universities and Health Care Organizations

Under capitation agreements, hospitals:

Under the Medicare DRG system, hospitals:

In a private health care organization, plant replacement and expansion funds account for:

Currently, which organization has jurisdiction over accounting and reporting standards for private colleges and universities?

Which of the following accounts would not typically be found on a health care organization's operating statement if that organization prepares it financial statements using functional presentation?

What is the basis of accounting used in accounting for not-for-profit health care organizations?

In the Statement of Cash Flow for a private not-for-profit college, endowment contributions are included in cash flows provided by (used for) ____________ activities.

A hospital's contractual adjustments:

Which of the following financial statements is required for the annual financial reports of public colleges and universities?

Charity care services provided by a hospital:

Which of the following is a category of health care entity?​

A private not-for-profit college or university would provide which of the following combinations of financial statements to their users?​

A public college or university would provide which of the following combinations of financial statements to their users?

In the Statement of Cash Flow for a public college or university, endowment contributions are included in cash flows provided by (used for) ____________ activities.

With the adoption of GASB statement #35 in 1999, governmental health care organizations are required to report their activities in a manner more like a(n) :

Atlee makes a cash gift to a not-for-profit hospital which is restricted by the donor to buy toys for the pediatric ward.It should be recorded in the:​

In a health care organization, Other Operating Revenue includes:

Government grants, like Pell Grants, which are essentially pass through financial aid to students are accounted for as

Which of the following is a category of health care entity?

A private not-for-profit college or university would provide which of the following combinations of financial statements to their users?

Atlee makes a cash gift to a not-for-profit hospital which is restricted by the donor to buy toys for the pediatric ward.It should be recorded in the: