33. A government college received a $2 million grant restricted to research on developing a
process for synthesizing a stable triple helix. $500,000 of qualifying research costs were
incurred during the year. The college should report:
A. Grant revenues of $2 million.
B. Grant revenues of $500,000 and a liability for unearned grant revenues of $1.5 million.
C. Grant revenues of $500,000 and deferred inflows of $1.5 million.
D. Unearned grant revenues of $2 million until the research is completed.
34. A state university receives an appropriation for from the state for capital projects of $5
million and a state appropriation for other purposes of $20 million. How should the amounts
received be reported in the university’s statement of revenues, expenses, and changes in net
position?
A. Operating revenues of $20 million and nonoperating revenues of $5 million.
B. Operating revenues of $20 million and capital contributions of $5 million.
C. Nonoperating revenues of $20 million and capital contributions of $5 million.
D. Nonoperating revenues of $25 million.
35. Cash collected by a government university from tuition and fees should be reported in the
statement of cash flows as
A. Operating activities.
B. Noncapital financing activities.
C. Capital and related financing activities.
D. Investing activities.
36. Fees collected from students but restricted to finance construction of a student recreation
facility should be reported in the statement of cash flows as:
A. Operating activities.
B. Noncapital financing activities.
C. Capital and related financing activities.
D. Investing activities.
37. Management’s discussion and analysis must be reported by
A. All colleges and universities.
B. Nongovernment not-for-profit colleges and universities.
C. All government colleges and universities.
D. Only government colleges and universities that report as special purpose governments
engaged only in business-type activities.
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38. Which financial statements are required for nongovernment, not-for-profit colleges and
universities?
A. Balance sheet, statement of revenues, expenditures, and other changes, and statement of
cash flows.
B. Balance sheet, statement of revenues, expenses, and changes in net assets, and statement
of cash flows.
C. Balance sheet, statement of revenues, expenses, and changes in net assets, and statement
of changes in net assets.
D. Balance sheet, statement of activities, and statement of cash flows.
39. The statement of cash flows of nongovernment, not-for-profit colleges and universities would
report which category of cash flows?
A. Investing.
B. Noncapital financing.
C. Capital and related financing.
D. Nonoperating financing.
1. A county hospital’s patient charges for the year were $3,000,000. Of this amount, 25% is
deemed to be uncollectible, 5% was considered to be charity services after the services were
provided, and 10% will be reduced by contractual adjustments with third party providers.
How much will be reported as expense in the external financial statements?
A. $0.
B. $300,000.
C. $750,000.
D. $1,200,000.
2. Hospitals disclose the level of charity services provided by disclosing
A. The amount of revenues foregone in providing the services
B. The direct costs of providing charity services
C. Both the direct and indirect costs of providing charity services
D. The quantities and types of charity services provided
3. The measurement focus used by governmental hospitals is the
A. Cash measurement focus.
B. Current financial resources measurement focus.
C. Economic resources measurement focus.
D. Accrual measurement focus.
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4. Hospital operating revenues include all of the following except
A. Investment income
B. Patient service revenue
C. Premium fees
D. Cafeteria sales
5. Patient service revenues of a government hospital should be reported in the statement of
revenues, expenses, and changes in net position
A. At the standard rates charged for the service regardless of bad debts, contractual
adjustments, policy discounts, etc.
B. Net of bad debts, contractual adjustments, policy discounts, charity services.
C. Net of contractual adjustments, policy discounts, charity services, but not net of bad
debts.
D. Net of bad debts, contractual adjustments, policy discounts, etc., but not net of charity
services.
6. Premium fee revenues should be recognized as
A. Revenue in the period the premium was received.
B. Revenue in the period covered by the premium.
C. Deferred revenue until the services are actually provided.
D. Revenue only if services with standard charges equal to or greater than the premium for
the period are provided in the period.
7. For external financial reporting purposes, charity services are reported as
A. Expenses.
B. Revenues.
C. Deductions from revenues.
D. Nonoperating gains and losses.
8. Which of the following statements about services contributed to a government hospital is
true?
A. Government hospitals may report contributed services as operating revenues.
B. Government hospitals are permitted, but not required, to recognize contributed services,
regardless of the material value of the services.
C. Government hospitals are required to report contributed services at their fair market
value.
D. Government hospitals are required to report contributed services as gains.
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9. Welby County Hospital entered into a capital lease to purchase a new MRI machine. The
capitalizable cost of the equipment was $400,000 and the hospital made a $40,000 down
payment. The entry required when the asset was acquired was
Debit Credit
A
Equipment
Cash
$400,000
40,000
B. Expenditures
Cash
$400,000
40,000
Expenditures
Cash
40,000
40,000
D
Equipment
Cash
$400,000
40,000
10. County General Hospital estimates uncollectible accounts to be $112,000 and contractual
adjustments to be $79,000. The entry needed to record these estimates would be
Debit Credit
A
.
Expenses
Allowance for Doubtful Accounts
$191,000
$191,000
Revenue Deductions – Contractual Adjustments
Allowance for Contractual Adjustments
79,000
79,000
Expenses
Allowance for Contractual Adjustments
79,000
79,000
.
Revenue Deductions – Contractual Adjustments
Allowance for Contractual Adjustments
79,000
79,000
11. If a government hospital gets unrestricted donations that are not a part of a hospital’s major
ongoing operations, those donations are classified on the statement of revenues, expenses,
and changes in net position as
A. An operating revenue.
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C. An other financing source.
D. A nonoperating gain.
12. Hospital equipment that originally cost $150,000 was sold for $60,000. The net book value
of the equipment at the date of sale was $75,000. The hospital should report
A. An operating loss of $15,000.
B. A nonoperating loss of $15,000.
C. Expenses of $75,000.
D. Other financing sources of $60,000.
13. The fair market value of a government hospital’s investments that are restricted for future
capital needs increased by $7,000. As of the end of the fiscal year,
A. Nonoperating gains will increase by $7,000.
B. General revenue will increase by $7,000.
C. This change in market value will not be reported unless the assets are sold.
D. Other financing sources will increase by $7,000.
14. At their recent board of directors meeting, the County Hospital Board voted to designate
$150,000 of current investments toward the renovation of the hospital planned for next year.
This designation will be result in
A. A credit to cash.
B. A debit to unrestricted investments.
C. A debit to investments–designated for plant replacement.
D. A debit to construction in progress.
15. County Medical Center received unrestricted contributions of $22,000. The hospital used the
contributions to support general services. These contributions would be reported on the
statement of cash flows as
A. Operating activities.
B. Noncapital financing activities.
C. Capital and related financing activities.
D. Investing activities.
16. A government hospital would not report which category of net position:
A. Specific purpose net position.
B. Unrestricted net position.
C. Restricted net position.
D. Net investment in capital assets.
17. Restricted assets of a government hospital are used to account for resources
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B. Restricted by bond and other contracts.
C. Restricted by the hospital board of directors.
D. Restricted by management.
18. A government hospital board of directors voted to set aside $3,000,000 of investments for
future hospital expansion. In the hospital balance sheet, these resources should be reported.
A. Unrestricted net position.
B. Restricted net position.
C. Net investment in capital asset.
D. Permanently restricted net position.
19. Which of the following statements of a government hospital is not required?
A. Statement of cash flows.
B. Balance sheet.
C. Statement of revenues, expenses and changes in net position.
D. Statement of changes in fund balances.
20. A government hospital received a cash donation restricted for construction of a new wing to
the hospital. How should the donation be reported be reported in the statement of cash flows?
A. Cash inflows from operating activities.
B. Cash inflows from noncapital financing activities.
C. Cash inflows from capital and related financing activities.
D. Cash inflows from investing activities.
21. In the statement of revenues, expenses and changes in net position, expenses of government
hospitals should be reported by
A. Natural classifications.
B. Department.
C. Function.
D. Either by natural classification or by function.
22. Dublin State Hospital would have earned $3,000,000 of patient service revenue under its
established rate structure for the year. However, it does not expect to collect this amount due
to charity allowances of $75,000, discounts to third-party payers of $200,000, and an
estimated uncollectible amount of $50,000. For the year, how much should Dublin State
Hospital report as patient service revenue?
A. $3,000,000.
B. $2,800,000.
C. $2,725,000.
D. $2,675,000.
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23. The standard charges for all services provided by a government hospital during the year were
$5,000,000. The charges included charges for charity services valued at $100,000. They were
reduced by contractual adjustments related to insurance contracts of $400,000. Uncollectible
amounts related to these services are estimated at $150,000. The hospital must report net
patient services revenues and expenses, respectively, of
A. $4,900,000 and $550,000
B. $4,500,000 and $150,000
C. $4,750,000 and $400,000
D. $4,350,000 and $0
24. Which item is reported significantly differently by government hospitals than by
nongovernment, not-for-profit hospitals?
A. Patient service revenues.
B. Net position.
C. Assets limited as to use.
D. Charity services.
25. Which of the following items are not reported in much the same manner by government
hospitals and nongovernment not-for-profit hospitals?
A. Patient service revenues.
B. Donated professional services.
C. Premium fee revenues.
D. Cafeteria sales.
26. Sources of generally accepted accounting principles for government hospitals include
A. AICPA Audit and Accounting Guide, Health Care Organizations.
B. FASAB standards.
C. FASB not-for-profit standards.
D. GAO Yellow Book.
27. Government hospitals and nongovernment not-for-profit hospitals report all of the following
in the same manner except
A. Patient service revenues
B. Rent revenues
C. Provision for bad debts
D. Charity services
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28. Which of the following are reported by both government and nongovernment, not-for-profit
hospitals?
A. Bad debt expense.
B. Restricted net position.
C. Investment income.
D. Unrestricted net position.
29. Which of the following are reported for government hospitals but not for nongovernment,
not-for-profit hospitals?
A. Capital leases.
B. Deferred inflows.
C. Net patient service revenues.
D. Premium fees.
30. A nongovernment not-for-profit hospital presents all of the following financial statements,
except
A. A balance sheet.
B. A statement of operations.
C. A statement of activities.
D. A statement of cash flows.
31. A nongovernment not-for-profit hospital presents the following categories on its statement of
cash flows, except
A. Cash flows from operating activities.
B. Cash flows from investing activities.
C. Cash flows from noncapital financing activities.
D. Cash flows from financing activities.
32. Nongovernment not-for-profit hospitals reported assets limited as to use for
A. Assets limited to a specific use by donors, by contracts, or by the hospital board.
B. Assets limited to a specific use by contracts or by the hospital board.
C. Assets limited to a specific use by contracts only.
D. Assets limited to a specific use by the hospital board only.
1. Who has responsibility to develop and recommend accounting and financial reporting
principles for the federal government?
A. Federal Accounting Standards Advisory Board.
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C. Governmental Accounting Standards Board.
D. Government Accountability Office.
2. Federal budgetary authority has been exceeded in the following situations except
A. When a commitment has occurred within an agency.
B. An apportionment exceeds an appropriation.
C. An obligation exceeds an allotment.
D. An expended appropriation exceeds an apportionment.
3. Cumulative results of operations is comprised of
A. Unexpended appropriations and earmarked funds.
B. Earmarked and non-earmarked funds.
C. Expended appropriations and unexpended appropriations.
D. Increases in appropriation authority less expended appropriations and withdrawal of
unexpended or unobligated appropriation authority.
4. The net position of the U.S. government is not:
A. The net assets of the federal government.
B. Equal to the difference between the assets and liabilities of the federal government.
C. Comprised of cumulative results of operations and unexpended appropriations.
D. Available for expenditure.
5. An appropriation was made for a federal agency in the amount of $1,000,000. The agency’s
unexpended appropriations component of net position
A. Does not change.
B. Increases by $1,000,000.
C. Decreases by $1,000,000.
D. Will either increase or decrease, depending on the nature of the appropriation.
6. Which of the following is a component of the net position of the U.S. Government?
A. Cumulative results of operations.
B. Restricted net position.
C. Capital Contributed by Treasury.
D. Net investments in capital assets.
7. Which of the following does not change cumulative results of operations of a federal agency?
A. Appropriations used.
B. Gains on sales of agency assets.
C. Expenses.
D. Purchase of capital assets.
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8. Which of the following funds would you not expect to find in federal government
accounting?
A. General fund.
B. Special funds.
C. Revolving funds.
D. Capital projects funds.
9. Which of the following budgetary accounts typically have a debit balance?
A. Apportionments.
B. Expended Appropriations–paid.
C. Expended Appropriations–unpaid.
D. Appropriations Realized.
10. Unexpended, unobligated appropriation authority from a previous year is representative of
A. A commitment.
B. An apportionment.
C. Expired authority.
D. A suballotment.
11. The budgetary fund balance of an agency is also known as
A. Unassigned fund balance.
B. Undesignated fund balance.
C. Unexpended appropriations.
D. Obligated appropriations.
12. What is the primary financing source reported by must federal agencies?
A. Sales revenues.
B. Appropriations used.
C. Appropriations received from Congress.
D. Apportionments.
13. In a federal agency’s budgetary accounts, which account is most similar to encumbrances in a
state or local government?
A. Allotments.
B. Commitments.
C. Undelivered orders–unpaid.
D. Appropriated capital.
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