Question 1

Private health care organizations, both not-for-profit and for-profit, follow GASB standards while government healthcare organizations follow FASB.

Accepted Answer

Private not-for-profit health care organizations follow FASB standards, including those specifically applicable to not-for-profits. Private for-profit health care organizations follow FASB standards excluding those written specifically for-not-for profits. If a health care organization is owned or controlled by a government, it is typically considered a special-purpose entity engaged only in business-type activities and would use proprietary fund accounting and follow GASB.

Question 2

Private-sector health care organizations use the three-category FASB format for the Statement of Cash flows, while public sector organizations use the four-category GASB format.

Accepted Answer

Private-sector health care organizations use the three-category operating, investing and financing) FASB format for the Statement of Cash flows, while public sector organizations use the four-category operating, noncapital financing, capital and related financing, and investing GASB format.

Question 3

Private for-profit health care organizations follow FASB standards excluding those written specifically for not-for-profits.

Accepted Answer

Private for-profit health care organizations follow FASB standards, excluding those specifically applicable to not-for-profits.

Question 4

Both commercial and private sector not-for-profit hospitals and health care providers follow FASB Statements 116 and 117.

Accepted Answer

Health care organizations owned or controlled by a government is typically considered a special purpose entity engaged only in business-type activities. These organizations use proprietary fund accounting which uses use the accrual basis and economic resources measurement focus.

Question 5

Because they are engaged in business-type activities, governmental health care organizations typically use the accrual basis and economic resources measurement focus.

Accepted Answer

Governmental health care organizations typically use the accrual basis and economic resources measurement focus because they are engaged in business-type activities.

Question 6

As both the FASB and the GASB approved the AICPA Health Care Guide, its requirements constitute Category B GAAP and must be followed by all health care organizations.

Accepted Answer

The AICPA Health Care Guide provides certain additional accounting and reporting requirements beyond those required by the FASB and the GASB standards. As both the FASB and the GASB approved the Health Care Guide, its requirements constitute Category B GAAP and must be followed by all health care organizations; private not-for-profit, governmentally owned and investor-owned health care organizations.

Question 7

The AICPA Health Care Guide applies to investor-owned, private not-for-profit, and government-owned hospitals.

Accepted Answer

The Health Care Guide applies equally to private not-for-profit governmentally owned and investor-owned health care organizations.

Question 8

Both public and private sector health care organizations measure transactions and events similarly, but use different equity accounts.

Accepted Answer

Public and private sector health care organizations measure transactions and events similarly, but use different equity accounts, reflecting the varying ownership categories.

Question 9

The AICPA Health Care Guide provides additional guidance regarding accounting and reporting requirements for voluntary health and welfare organizations.

Accepted Answer

The Health Care Guide must be followed by all health care organizations.

Question 10

The AICPA Audit and Accounting Guide: Health Care Organizations applies equally to private not-for-profit, investor-owned, and governmentally owned health care organizations.

Accepted Answer

Helping to assure comparability across health care organizations with varying ownership structures, the AICPA Audit and Accounting Guide: Health Care Organizations applies equally to private not-for-profit, governmentally owned and investor-owned health care organizations.

Question 11

Not-for-profit business-oriented health care organizations use accrual accounting.

Accepted Answer

Not-for-profit business-oriented, investor-owned and governmental health care organizations all use accrual accounting.

Question 12

Government hospitals are typically considered engaged in business-type activities.

Accepted Answer

Health care organizations owned or controlled by a government is typically considered a special purpose entity engaged only in business-type activities. These organizations use proprietary fund accounting which uses use the accrual basis and economic resources measurement focus.

Question 13

Government owned hospitals follow FASB Statements 116 and 117 for not-for-profit organizations.

Accepted Answer

Health care organizations owned or controlled by a government is typically considered a special purpose entity engaged only in business-type activities. These organizations use proprietary fund accounting which uses use the accrual basis and economic resources measurement focus.

Question 14

If a health care organization is owned or controlled by a government, it is typically considered a special-purpose entity engaged only in business-type activities and would use proprietary fund accounting.

Accepted Answer

If a health care organization is owned or controlled by a government, it is typically considered a special-purpose entity engaged only in business-type activities and would use proprietary fund accounting.

Question 15

The AICPA Health Care Guide provides accounting and reporting requirements that override GASB and FASB standards, but apply only to health care providers.

Accepted Answer

The AICPA Health Care Guide provides certain additional accounting and reporting requirements beyond those required by the FASB and the GASB standards. As both the FASB and the GASB approved the Health Care Guide, its requirements constitute Category B GAAP and must be followed by all health care organizations.

Question 16

Government-owned health care organizations do not report depreciation expense.

Accepted Answer

Health care organizations owned or controlled by a government is typically considered a special purpose entity engaged only in business-type activities. These organizations use proprietary fund accounting which uses use the accrual basis and economic resources measurement focus.

Question 17

For accounting purposes, health care organizations include HMOs and individual medical practitioners, as well as hospitals.

Accepted Answer

For accounting purposes, health care organizations include organizations such as clinics, laboratories, surgery centers, continuing care retirement communities, HMOs and individual medical practitioners, drug and alcohol rehabilitation centers, as well as hospitals.

Question 18

Both commercial and not-for-profit hospitals in the private sector follow FASB standards.

Accepted Answer

Private not-for-profit health care organizations follow FASB standards, including those specifically applicable to not-for-profits. Private for-profit health care organizations follow FASB standards excluding those written specifically for-not-for profits. If a health care organization is owned or controlled by a government, it is typically considered a special-purpose entity engaged only in business-type activities and would use proprietary fund accounting and follow GASB.

Question 19

Both governmental owned and private health care providers use the modified accrual basis of accounting and the economic resources measurement focus.

Accepted Answer

Not-for-profit business-oriented, investor-owned and governmental health care organizations all use accrual accounting.

Question 20

Like charities and private colleges, private not-for-profit health care organizations follow FASB standards.

Accepted Answer

Private not-for-profit health care organizations follow FASB standards, including those specifically applicable to not-for-profits.

Quiz 12: Accounting for Hospitals and Other Health Care Providers

Private health care organizations, both not-for-profit and for-profit, follow GASB standards while government healthcare organizations follow FASB.

Private-sector health care organizations use the three-category FASB format for the Statement of Cash flows, while public sector organizations use the four-category GASB format.

Private for-profit health care organizations follow FASB standards excluding those written specifically for not-for-profits.

Both commercial and private sector not-for-profit hospitals and health care providers follow FASB Statements 116 and 117.

Because they are engaged in business-type activities, governmental health care organizations typically use the accrual basis and economic resources measurement focus.

As both the FASB and the GASB approved the AICPA Health Care Guide, its requirements constitute Category B GAAP and must be followed by all health care organizations.

The AICPA Health Care Guide applies to investor-owned, private not-for-profit, and government-owned hospitals.

Both public and private sector health care organizations measure transactions and events similarly, but use different equity accounts.

The AICPA Health Care Guide provides additional guidance regarding accounting and reporting requirements for voluntary health and welfare organizations.

The AICPA Audit and Accounting Guide: Health Care Organizations applies equally to private not-for-profit, investor-owned, and governmentally owned health care organizations.

Not-for-profit business-oriented health care organizations use accrual accounting.

Government hospitals are typically considered engaged in business-type activities.

Government owned hospitals follow FASB Statements 116 and 117 for not-for-profit organizations.

If a health care organization is owned or controlled by a government, it is typically considered a special-purpose entity engaged only in business-type activities and would use proprietary fund accounting.

The AICPA Health Care Guide provides accounting and reporting requirements that override GASB and FASB standards, but apply only to health care providers.

Government-owned health care organizations do not report depreciation expense.

For accounting purposes, health care organizations include HMOs and individual medical practitioners, as well as hospitals.

Both commercial and not-for-profit hospitals in the private sector follow FASB standards.

Both governmental owned and private health care providers use the modified accrual basis of accounting and the economic resources measurement focus.

Like charities and private colleges, private not-for-profit health care organizations follow FASB standards.