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Unformatted text preview: CHAPTER 17: ACCOUNTING FOR HEALTH CARE ORGANIZATIONS OUTLINE Number Topic Type/Task Status (re: 12/e) Questions: 17-1 Fund accounting Explain 17-1 17-2 Financial statements List 17-2 17-3 Capital assets Compare 17-3 17-4 Deductions from revenue Explain 17-4 17-5 Investments Compare 17-5 17-6 Restricted gifts Describe 17-6 17-7 Assets limited as to use Explain 17-7 17-8 Contingent liabilities Describe 17-8 17-9 Diagnosis-related groups Explain 17-9 17-10 Auditing issues List New Cases: 17-1 Charity care Evaluate 17-1 17-2 Purchase of a health care organization Evaluate 17-2 revised 17-3 Health care reform Internet 17-3 Exercises/Problems: 17-1 Various Multiple Choice 17-1 17-2 Nongovernmental hospital Journal Entries, F. S. 17-2 17-3 Restricted contributions Journal Entries 17-3 17-4 Third party payors Calculate 17-4 17-5 Nongovernmental Hospital Financial statements 17-5 revised 17-6 Public hospital Enterprise Fund Journal Entries 17-6 17-7 Governmental hospital Analysis New 17-8 Nongovernmental hospital Analysis New 52 CHAPTER 17: ACCOUNTING FOR HEALTH CARE ORGANIZATIONS Answers to Questions 17.1. False. FASB permits for-profit and not-for-profit health care organizations to follow the AICPA Audit and Accounting Guide Health Care Organizations , which includes SFAS Nos. 116 and 117 guidance for not-for-profit health care providers. GASBS 34 guidance requires governmental health care providers engaged in business-type activities to use proprietary fund accounting principles, and those engaged in governmental activities to use governmental funds. The AICPA Audit and Accounting Guide Health Care Organizations, considered category (b) authority after GASB and FASB statements according to AICPA SAS No. 69 , allows fund accounting for internal purposes. 17-2. The AICPA Audit and Accounting Guide Health Care Organizations requires health care providers to issue a Balance Sheet, Statement of Operations, Statement of Changes in Equity (or net assets/fund balance), and a Statement of Cash Flows, as well as Notes to the Financial Statements. Considerable discretion, however, is allowed in presenting this financial information. Governmental health care organizations that engage in both governmental and business-type activities must provide fund financial statements and government-wide financial statements, according to GASBS 34. 17-3. There are no longer major differences between the accounting treatment accorded hospital property, plant, and equipment used in rendering hospital services and the accounting treatment accorded capital assets of governmental units. GASBS 34 provides that even general capital assets of a public hospital, if any, be recorded in the government-wide statements with related depreciation expense reporting in the statement of activities....
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- Spring '10