Choose the best answer.
1. Which of the following entities would consider portions of the AICPA Audit and Accounting Guide: Health Care Entities category b authoritative guidance?
a. A business-type government hospital.
b. A not-for-profit hospital.
c. A for-profit hospital.
d. All of the above.
2. A not-for-profit hospital would present all of the following financial statements except a
a. Balance sheet or statement of financial position.
b. Statement of revenues, expenses, and changes in net position.
c. Statement of operations.
d. Statement of cash flows

3. Which of the following is a true statement regarding a performance indicator?
a. All health care organizations are required to report a performance indicator.
b. Only governmental health care organizations are required to report a performance indicator.
c. The purpose of reporting a performance indicator is to make it easier to compare the results of operations of not-for-profit health care organizations to those of for-profit health care organizations.
d. The purpose of reporting a performance indicator is to assist in evaluating the efficiency and effectiveness of a health care organization’s operating activities.
4. Fees received by a hospital for a “healthy heart” workshop offered to patients should be reported as
a. Patient service revenue.
b. Administrative service revenue.
c. Other revenue.
d. Non operating gains.
5. Which of the following is an example of an asset limited as to use?
a. Real estate donated to build a clinic for the homeless.
b. Contributed cash that the board is considering setting aside for self insurance.
c. Investments bequeathed to the health care organization where the income is to be used to fund operating costs for a cancer clinic.
d. Funds from a sale of bonds that are required by covenant to be used to build a new hospital.
6. Why are health care organizations motivated to track the actual costs of services?
a. Both GASB and FASB require it.
b. They must report their actual expenses so that third-party payors will reimburse them.
c. Third-party payors contract with the organization to reimburse a set amount, and the organization risks a loss if costs are greater than the amount reimbursed.
d. Any amount not reimbursed by a third-party payor or paid by the patient must be included in the amount reported as charity care.
7. The controller for Blooming field Regional Hospital estimated that the un-collectible patient accounts have increased by $152,000. The controller’s journal entry included a debit to Bad Debt Expense and a credit to Allowance for Un-collectible Receivables. Based on this, Blooming field Regional Hospital is
a. An investor-owned health care organization.
b. A nongovernmental not-for-profit health care organization.
c. A governmental not-for-profit health care organization.
d. Properly recording the estimate for un-collectible accounts under FASB and GASB standards.
8. Wellness Psychiatric Clinic received a large contribution from the family of a former patient. The contribution came with a request that the funds be used or invested to support any activities that the clinic felt would be best. On this not-for-profit clinic’s statement of cash flows, this contribution would be reported in which section?
a. Non capital financing activities.
b. Operating activities.

c. Financing activities.
d. Investing activities.
9. The Patient Protection and Affordable Care Act, passed in 2010,
a. Resulted in a decrease in the number of insured patients.
b. Did not impact Form 990 filings for 501(c)(3) health care organizations.
c. Required health care organizations to implement new cost accounting systems where each service related to a medical procedure is tracked and submitted for payment separately.
d. Tied physician pay in part to the quality of care provided.
10. Which of the following would be most useful for evaluating the financial profitability of a not-for-profit health care organization?
a. Current ratio.
b. Debt-to-capitalization.
c. Excess margin.
d. Debt services coverage.