Chap017a - Chapter 17 - Accounting for Health Care...

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Chapter 17 - Accounting for Health Care Organizations chapter 17 Accounting for Health Care Organizations Answer Key 1. Financial reporting standards for all government owned and operated hospitals are established by the GASB. TRUE 2. Patient service revenues and related receivables include charges for charity care services. FALSE 3. In accounting for health care entities, the provision for bad debt should always be recorded as a revenue deduction, rather than as an expense. FALSE 4. All health care entities recognize all revenues and expenses on the accrual basis of accounting. FALSE 5. An expense for diabetes research that was financed by temporarily restricted contributions would be recorded as a decrease of unrestricted net assets by a not-for-profit health care organization. TRU 6. Long-term debt related to a construction project in a public hospital that follows business- type accounting should be reported as other financing sources. FALSE 7. When a governmental hospital purchases capital assets from resources restricted by donors for that purpose, the net assets account Net Assets—Invested in Capital Assets, Net of Related Debt is increased. TRUE 8. Health care is provided by organizations that may be for-profit, not-for-profit, or governmental; although roughly half of all health care is provided by not-for-profit entities. TRUE 9. Endowment income expended by a not-for-profit health care organization for purposes specified by the donor should be recorded as a decrease in temporarily restricted net assets using the account Net Assets Released from Restrictions. TRUE 17-1
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Chapter 17 - Accounting for Health Care Organizations 10. Assets set aside by the governing board for the eventual construction of a hospital addition should be recorded as "assets limited as to use". TRUE 11. Equipment purchased from the restricted resources of a private hospital should be depreciated. TRUE
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Chap017a - Chapter 17 - Accounting for Health Care...

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