See the balance sheet of a not-for-prot hospital presented on page 84. It is intended to display

Question:

See the of a not-for-proﬁt hospital presented on page 84. It is intended to display the hospital’s fund structure. Inasmuch as it does not conform to FASB standards, it is inappropriate for external reporting.
1. On what basis of accounting is the general fund maintained? How can you tell?
2. Are the plant replacement and expansion funds on a cash basis of accounting? How can you tell?
3. Why do you suppose that the unrestricted fund assets “whose use is limited [designated] by board for capital improvements” are not reported in a restricted fund?
4. Suppose the hospital were to present its in three columns, one each for unrestricted, temporarily restricted, and permanently restricted resources. Which of the funds would most likely be reported in each of the columns?
5. What funds in a government are likely to be most comparable to the speciﬁc purpose funds?

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...