Questions and Answers of Government And Not For Profit Accounting

(Analyzing transactions on a work sheet)Sally Golfo, a registered nurse, opens a new business called Sally's Eldercare. Golfo plans to care for the elderly herself in a facility that she will rent.
(Analyzing transactions on a work sheet)}Dr. Harlan Elliott opened a magnetic resonance imaging (MRI) facility, to be known as Harlan MRI. These transactions took place during his first month of
Ted's Motor Pool provides taxi services. Ted, who went into business recently, keeps records on a work sheet similar to that illustrated in the text. At the start of the new year, his work sheet
(Analyzing accrual transactions on a work sheet)Analyze the following accrual-type events and add them to the work sheet you prepared for P15-1.1. Adjust for the expiration of 1 -month's rent.2.
Analyze the following accrual-type events and add them to the work sheet you prepared for P15-2.1. Adjust for the "using up" of the MRI equipment during the month. (Assume the equipment will have a
(Analyzing accrual transactions on a work sheet)Analyze the following accrual-type events and add them to the work sheet you prepared for P15-3.1. Adjust for the expiration of 1 month's rent.2.
(Recording transactions in journals and ledgers)Using the information given in P15-1 and P15-4, record the transactions in general journal form. Then, post the journal entries to ledger T-accounts,
(Recording transactions in journals and ledgers)Using the information given in $\mathrm{P} 15-2$ and $\mathrm{P} 15-5$, record the transactions in general journal form. Then, post the journal entries
(Recording transactions in journals and ledgers)Using the information given in P15-3 and P15-6, record the transactions in general journal form. Then post the journal entries to ledger T-accounts,
(Matching accounts and financial statements)Following are several financial statement classifications and accounts:Caution: Some items may appear in more than one statement classification. Example: A
(Preparing a trial balance and financial statements)Required: 1. From the ledger accounts prepared for P15-7, prepare a trial balance.2. Extend the trial balance into an eight-column work sheet like
Required: 1. From the ledger accounts prepared for P15-8, prepare a trial balance.2. Extend the trial balance into an eight-column work sheet like that shown in Table 15-16, and use the work sheet to
(Preparing a trial balance and financial statements)Required: 1. From the ledger accounts prepared for P15-9, prepare a trial balance.2. Extend the trial balance into an eight-column work sheet like
(Preparing a closing entry)Required: Based on the answers you obtained in P15-11, prepare the closing entry.
(Preparing a closing entry)Required: Based on the answers you obtained in P15-12, prepare the closing entry.
(Preparing a closing entry)Required: Based on the answers you obtained in P15-13, prepare the closing entry.
(Accounts receivable and sales transactions; comprehensive problem)Camp Bryn Mawr, a summer camp, started the year with cash of $\$ 40,000$, land costing $\$ 300,000$, and buildings and equipment
Which major publications deal specifically with the application of GAAP for health care organizations?
To what extent does the GASB permit government-owned health care entities that use proprietary fund accounting to apply FASB accounting standards?
Distinguish between the kinds of resources accounted for in the General Fund and the kinds accounted for in Restricted Funds.
Describe the four broad categories of resources included in the General Fund.
What is a contractual adjustment?
A hospital has contractual adjustments, takes charity cases, grants discounts to clergy, and has bad debts. How does each affect net patient service revenue?
How do prospective and retrospective payment agreements affect net patient service revenue?
A not-for-profit hospital invests a $\$ 10,000$ restricted donation in equity securities. At the date of its financial statements, the securities have a fair value of $\$ 12,000$. How would the
Describe the accounting process to record the segregation of resources by the managing board of a hospital.
A donor contribution for a specific operating purpose should be recognized by a not-for-profit hospital as $\qquad$ . A governmental hospital recognizes it as $\qquad$ . (For each blank, answer
If a governmental hospital receives a cash grant that contains a time requirement, when should the hospital recognize revenues for the grant?
Discuss the differences in the kinds of information a user of a not-for-profit hospital's financial statements can obtain from the statement of operations, the statement of changes in net assets, and
(Fill in the blanks-general terminology)1. The AICPA publishes the $\qquad$ as a source of information on hospital accounting.2. FASB standards (always, sometimes, never) $\qquad$ apply to
(Use of funds)The Brite-Hope Hospital uses the following types of funds:GF General Fund EF Endowment Funds PREF Plant Replacement and Expansion Funds SPF Specific Purpose Funds Using these codes,
(Identification of net asset classifications)Assume that Brite-Hope Hospital, in E13-2, is a not-for-profit hospital. Using the following letters identify which net asset classification would be
(Matching)Match the items on the right with those on the left by placing the letter of the best match in the space provided.a. All income required to be paid to the donor or other designated party
The following transactions were incurred by the Numb Hospital, a not-forprofit entity, during January 2004:1. The hospital billed its patients for $\$ 250,000$.2. Nurses and doctors employed by the
(Accounting for board-designated funds)On January 1, 2004, the managing board of a governmental hospital set aside $\$ 35,000$ in a fund to upgrade the skills of its newly hired nurses. During the
(Accounting for uncollectible patient accounts)The Metro County Hospital could not collect the amount billed to a patient. The patient declared bankruptcy and had no assets with which to pay his
(Accounting for contractual adjustments)A hospital arranges with a third-party payer to charge the third party 75 percent of its established billing rates. During January 2004, the hospital provided
(Accounting for premium revenues)A hospital arranges with an HMO to provide hospital care to the HMO's members at a specific rate per member, per month. During the month of June, the HMO paid the
(Accounting for net patient service revenues)Shelley Marder Hospital had the following transactions during the year ended December 31, 2004:1. The hospital provided services to third-party payer A
(Journal entries to record investment transactions)A hospital purchased 100 shares of General Electric stock on June 30, 2004, for $\$ 3,100$, intending to hold the stock until needed for plant
(Financial reporting of investment gains and losses)Reread the material on reporting investment gains and losses in the section on "Investment Returns" and consider the journal entries you made in
(Journal entries to record the receipt and use of contributions by a not-forprofit hospital)Mary Milligan Hospital, a not-for-profit hospital, had the following transactions during the year ended
(Use of funds)The following transactions relate to the Tableaux Hospital, a not-for-profit hospital. Indicate which fund or funds would be used to record the data.1. Collected $\$ 2,345$ from a
(Transactions involving General Fund and restricted funds)Using the same information given in E13-14, prepare the journal entries that would be used to record the data. Identify each type of fund
(Financial statements)Using the following codes, indicate which statement would be used to report each item for a not-for-profit hospital.BS Balance sheet SO Statement of operations1. Land,
(Matching)Match items on the right with those on the left by placing the letter of the best match in the space provided.a. Restricted Fundsb. Prepared for a not-for-profit hospital's changes in
1. In accordance with its established billing rates, Alpha Hospital provided services amounting to $\$ 14$ million during the year ended December 31 , 2004. Included in the $\$ 14$ million were
(Multiple choice)1. A governmental hospital has not transferred risk on malpractice claims to a third-party insurer. Which of the following statements best expresses the general rule regarding the
(Multiple choice-governmental hospital)1. What are the components of the net asset section of a governmental hospital's balance sheet?a. Unrestricted; temporarily restricted; permanently restrictedb.
(Accounting for and reporting patient service revenues)The Andrew Gorman Hospital had the following transactions regarding its patient service billings during fiscal year 2004:1. The total services
(Accounting for medical malpractice claims)Caire-Less Hospital carries no insurance for medical malpractice claims. Analysis of medical malpractice claims at year-end shows the following:1. Claim A
New City Hospital was established in 2004. This not-for-profit hospital began operations by issuing bonds to acquire the assets of an existing hospital. The following transactions occurred during the
(Journal entries and financial statements-General Fund) \\ Following is a trial balance for the Metro General Hospital, a governmental hospital:During 2004, the following transactions took place:1.
(Journal entries for restricted funds and General Fund)The not-for-profit West Street Hospital had the following transactions during 2004:1. A gift of $\$ 100,000$ was received from Warso Stores. The
(Journal entries for hospitals)Following is a trial balance for Darwin Memorial, a not-for-profit hospital:During the 2004-2005 fiscal year, the following selected transactions took place:1. Darwin
How does the organization of the statement of net assets help the reader assess an entity's financial position?
How do the calculations of ratios and per capita information assist in assessing an entity's financial position and financial condition?
Why is it appropriate to use time-series analysis and comparative analysis in assessing an entity's operating results, financial position, and financial condition?
What is the purpose of calculating a pension's funded ratio?
(Multiple choice)1. When common size statements are prepared, how are all data elements treated?a. Converted to amounts per capitab. Presented on a single pagec. Shown as percentages of 100d. Shown
(Computation of current ratio and quick ratio)The following information is extracted from Alpha Hospital's balance sheet:\section*{Required: 1. Compute Alpha's current ratio. \\ 2. Compute Alpha's
(Computation of a hospital's debt service coverage)The following information is extracted from Beta Hospital's financial statements:Required: Compute Beta's debt service coverage and times interest
(Computation of days' revenue in patient accounts receivable)The following information is extracted from Gamma Hospital's financial statements:Required: Compute the number of days' revenue in patient
(Computation of a not-for-profit organization's program services ratio) A voluntary health and welfare organization obtains contributions to perform various social services. The following information
(Computation of a city's budgetary cushion)The following information is extracted from the general fund column of a city's fund financial statements:Required: Compute the city's budgetary cushion.
(Computation of a city's debt burden)The following information is extracted from a city government's CAFR:Required: Compute the city's debt burden based on population and on property value. Make
(Computation of a village's operating margin)The following information is extracted from a village's governmental funds statement of revenues, expenditures, and changes in fund balances (amounts in
(Computation of financial analysis ratios for a hospital from a trial balance) Following is a condensed trial balance of the accounts of Palindrome Hospital at December 31, 2004 (amounts in
(Assessment of hospital financial analysis ratios)Palindrome Hospital wants to issue $\$ 25$ million of additional long-term debt in order to expand its operations and modernize its equipment. It
(Computation of financial analysis ratios for a county government)Following are extracts from the financial statements of Elisa County for the year ended December 31, 2004. The funds shown are the
(Assessment of governmental financial analysis ratios)The state in which Elisa County in P14-3 is located publishes certain financial analysis ratios for all counties within the state. To provide a
(Analyzing trends based on common size financial statements)Table 9-10 in Chapter 9 shows Grafton's expenditures by function from 1991 through 2000. Review the data to determine whether any trends
Why do credits increase the equity account?
If the columns of a trial balance total to the same amount, the information included in the accounts must be correct. Do you agree or disagree? Why?
Describe the interrelationship among the three statements in Q15-13.
(Preparing transactions)For each of the following categories, compose a transaction that will cause that category to increase and one that will cause it to decrease:1. Assets 2. Liabilities 3. Equity
(Associating changes with specific accounts)For each of the following transactions of the Kit-Kat Company, identify the accounts that would be increased and those that would be decreased:1. The owner
(Calculating the change in equity from balance sheet data)The beginning and ending balances in certain account categories of the Release Company are as follows:Based upon this information, what was
(Associating accrual-type changes with specific accounts)For each of the following events affecting the Kit-Kat Company in E15-2, identify the accounts that would be increased and those that would be
(Associating accrual-type changes with specific accounts)For each of the following events affecting Becca's Bootery, identify the accounts that would be increased and those that would be decreased on
(Using debits and credits)Identify the account(s) that would be debited and/or credited as a result of the following transactions:1. The owner invested $\$ 10,000$ in the business.2. Supplies were
(Associating debits and credits with account categories)Each of the account categories listed in E15-1 is increased with either a debit or credit. Indicate which is used to record an increase in each
(Using debits and credits)William T. Fudd III acts as a rental agent for several large apartment houses. Fudd's income is determined by a commission on the number of apartments he rents. During the
(Recording transactions in a general journal)Record the following transactions in general journal form for the Control Company, a private investigation service:2004 January 22 Susan Bigger invested
(Posting to a general ledger)Post the transactions in E15-9 to general ledger accounts.
(Recording transactions in a general journal)Using the data in E15-8, record the transactions in general journal form.
(Preparing a trial balance)Using the following information, prepare a trial balance for the Forfeit Company at June 30, 2004. Accumulated depreciation-equipment Taxes payable Equipment $ 4,000 200
(Preparing a trial balance)Prepare a trial balance based upon the information in E15-10.
(Computation of balance sheet amounts)Based upon the following information, compute total assets, total liabilities, and total capital; in addition, determine whether all of the accounts are
(Relating accounts and financial statements)Identify the financial statement on which each of the following items would appear:a. Bonds payableb. Rent revenuec. Owner's capital, beginning balanced.
(Fill in the blanks-definitions)Match the items in the right column with those in the left column. $\qquad$1. Statement of changes in owner's equity $\qquad$2. Income statement 3. Net income 4.
(Preparing closing entries and determining the ending balance in capital) Prepare the appropriate closing entry based on the information in E15-12 and determine the ending balance in R. Key, Capital.
(Accounting for uncollectible accounts receivable)South Salem Daycare Center is a not-for-profit organization that provides daycare services. Prepare journal entries for the center to record the
(Accounting for the purchase and sale of merchandise)Nomoto Cars is an automobile dealership. Prepare journal entries to record these transactions:1. Nomoto receives 10 automobiles from a
How can financial reporting assist in fulfilling government's duty to be publicly accountable and assist users in assessing that accountability?
Under what circumstances is a primary government considered to be financially accountable for a legally separate organization?
When reporting component units in a governmental organization's financial statements, what is the difference between blending and discrete presentation?
What are the major components of a comprehensive annual financial report?
What are the components of the basic financial statements?
What is the difference between fund financial statements and governmentwide financial statements?

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