12. T / F Cash accounting is the system of accounting that records revenues in the accounting period in which the cash payment is received and expenses in the accounting period when payment is made.

13. T / F Depreciation is an expense that measures the gain in value of a capital asset.

14. Assets - Liabilities = ______________________________________

15. The ABC reference laboratory purchases a new van to collect specimens from the local clinics on May 1 (the fiscal year runs Jan 1 - Dec 31). The cost of the van was $35,000 and an expected life of 5 years. What amount would be depreciated at the end of the current fiscal year? ___________________________________________________________

16. The year-end balance sheet of a not for profit hospital shows total assets of $5,545,000 and total liabilities of $2,000,000. Calculate Net Assets.

______________________________________________________________________

17. T / F A partnership is a business owned by two or more individuals and is a very common legal structure for medical practices.

18. T / F For-profit hospitals pay income tax on profits earned through delivery of healthcare services.

19. T / F One major advantage of a C corporation is that the corporation is limited liability for the owners.

20. Give two examples of current liabilities on a balance sheet

21. T / F Net medical service revenues is the difference between gross medical revenues and allowance for uncollected debt.

22. T / F Revenues and Expense on an Income Statement must always be equal.

23. T / F Expenses for a loan payment on the Income Statement only include interest expense.

24. A business that is owned by a single owner and not incorporated is called a

______________________________________________________________________

25. T / F The primary goal of a Board of Directors of a publicly held corporation is to maximize the owner's wealth.

26. A reimbursement methodology that is based on paying a provider a fixed amount per patient per month is called _________________________________________________

27. T / F The Federal government agency responsible for ensuring financial statements are reported correctly is the Securities Enforcement Commission.

28. T / F The Sarbanes-Oxley Act requires both the CEO and CFO to personally certify the financial statements are correct.

29. T / F The assumption of "going concern" assumes the business will have a

limited life.

30. When an organization's expenses must be matched with the revenues to which they are related, it is called ____________________________________________________

31. T / F In accrual accounting the accounting transaction recognizes revenue and expense when they are incurred.

32. T / F An Income Statement covers a snapshot in time.

33. Define an asset: ___________________________________________________

___________________________________________________________________

34. Define a liability: ___________________________________________________

___________________________________________________________________

35. T / F Current assets includes equipment that has a useful life of greater than one year.

36. T / F Current liabilities includes the last year of a loan that has been paid over several years.

37. Working Capital = _______________________ - ________________________

38. T / F Long-term securities investments are listed on the Balance Sheet at

their fair market value.

39. T / F The value of equipment and buildings are listed on the Balance Sheet at their market value.

40. T / F Accounts Payable represent payment obligations that have been incurred but have not yet been paid.