1 Nonprofit hospital X provides emergency room care to all patients who are critically injured, including people who cannot pay In Year 1, the hospital incurred direct costs of $50,000 providing such treatment to patients who it knew could not pay Indirect costs, such as occupancy and supervision, for such treatment totaled $10,000 If the hospital had charged its posted, standard rates, it would have billed $100,000 for such care If it had charged the normal amount it receives from all paying patients, including those with lower fees due to arrangements with insurance companies, it would have charged $75,000 Which of the following statements is correct about how the services and costs are shown in the financial statements is correct A Revenues would include charity care of $100,000, and expenses would show related costs of $60,000 B Revenues would include charity care of $75,000, and expenses would show related costs of $50,000 C Revenues would include charity care of $100,000, a contra revenue for contractual adjustments of $25,000, and expenses would show related costs of $60,000 D No revenues would be shown There would be footnote disclosure of the costs, including both the direct and indirect costs 2 On the statement of activities, how are expenses shown A All expenses are shown in the unrestricted column B Only expenses involving unrestricted donations are shown in the unrestricted column Other expenses are shown in the appropriate restricted columns C All expenses are shown in the donor restricted column D Organizations have the option of reporting expenses in either the donor restricted or unrestricted columns 3 Which of the following statements regarding the economic environment of nonprofit organizations is NOT true A Some nonprofit organizations are heavily reliant on donations B Nonprofit organizations are generally exempt from federal income taxes C Nonprofit organizations often compete with each other D Nonprofit organizations have similar access to capital markets as for profit organizations do

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1. Nonprofit hospital X provides emergency room care to all patients who are critically injured, including people who cannot pay. In Year 1, the hospital

Nonprofit hospital X provides emergency room care to all patients who are critically injured, including people who cannot pay. In Year 1, the hospital incurred direct costs of $50,000 providing such treatment to patients who it knew could not pay. Indirect costs, such as occupancy and supervision, for such treatment totaled $10,000. If the hospital had charged its posted, standard rates, it would have billed $100,000 for such care. If it had charged the normal amount it receives from all paying patients, including those with lower fees due to arrangements with insurance companies, it would have charged $75,000. Which of the following statements is correct about how the services and costs are shown in the financial statements is correct?

		A: Revenues would include charity care of $100,000, and expenses would show related costs of $60,000
		B: Revenues would include charity care of $75,000, and expenses would show related costs of $50,000
		C: Revenues would include charity care of $100,000, a contra revenue for contractual adjustments of $25,000, and expenses would show related costs of $60,000
		D: No revenues would be shown. There would be footnote disclosure of the costs, including both the direct and indirect costs

On the statement of activities, how are expenses shown?

A. All expenses are shown in the unrestricted column

B. Only expenses involving unrestricted donations are shown in the unrestricted column. Other expenses are shown in the appropriate restricted columns

C. All expenses are shown in the donor restricted column

D. Organizations have the option of reporting expenses in either the donor restricted or unrestricted columns

Which of the following statements regarding the economic environment of nonprofit organizations is NOT true?

		A: Some nonprofit organizations are heavily reliant on donations
		B: Nonprofit organizations are generally exempt from federal income taxes
		C:Nonprofit organizations often compete with each other
		D: Nonprofit organizations have similar access to capital markets as for-profit organizations do