GNP Final

A state has the obligation

false

The federal government’s primary objective

false

Not-for-profit corporations cannot lobby

false

The not for profit organization for tax exempt

true

the unrelated business income tax could be

true

If a tax-exempt organization dissolves

true

boards member of a not for profit

true

All officers of a not for profit

false

not for profit organizations risk loss

true

one of the limitations

true

a 501( c ) (3) organization

false

only 501( c)(3) organizations

false

political parties

true

all not for profit organizations are

false

unrelated business income tax is reported

false

a not for profit typically has gross receipts

true

A nongovernmental tax-exempt organization must complete a Form 990 and send it to the internal revenue service

A. only if they have unrelated business income

B. if they are not a religious organization, and have gross receipts of $5,000 or more each year

C. if they have gross receipts of $1,000 or more each year

D. Only if they are private foundation, not a public charity

If they are not a religious organization, and have gross receipts of $5,000 or more each year

Which of the following not-for-profit organizations is most likely to be tax-exempt under IRC sec. 501(c)(3)

A. beta kappa alpha sorority

b. peaceful dreams cemetery association

c. regional association of tree trimmers

d. survivors of breast cancer club

survivors of breast cancer club

The Internal Revenue Service may impose intermediate sanctions on all of the following transactions between a not-for-profit organization and its executive officer except:

a. Excessive compensation.

b. The not-for-profit organization paying more than the fair rental value for property owned by the officer.

c. A bargain on the sale of assets.

d. Fringe benefits comparable to those given to all employees.

fringe benefits comparable to those given to all employees

The term that means information skewed toward a particular belief with a tendency to have little or no factual basis is

a. political influence

b. legislation

c. propaganda

d. lobbying

propaganda

A tax-exempt organization that receives its support primarily from a large number of individuals or corporations and a relatively small amount from investment income is called a:

a. Public charity.

b. Private foundation.

c. Public foundation.

d. Voluntary health and welfare organization.

public charity

Public disclosure rules require that a tax-exempt not-for-profit organization:

a. Make available a copy of its Form 990 to the public for a period of up to three years.

b. Post a copy of its articles of incorporation and by-laws on its website.

c. Provide a copy of the minutes to all board meetings to any person who requests the minutes within 90 days of the board meeting.

d. Make available a copy of its Form 990-T, but not its Form 990, to the public for a period of up to two years.

make available a copy of its form 990 to the public for a period of up to three years

A good measure of whether a not-for-profit organization is a "going concern" and can sustain its operations into the future is:

A. total revenues divided by assets

B. percentage of unrestricted net assets to average monthly operating expenses

C. percentage of program expenses to total expenses

D. fund-raising expenses as a percentage of public support

percentage of unrestricted net assets to average monthly operating expenses

A good measure of whether a not-for-profit organization is "liquid" and can meet its short-term obligations is:

A. percentage of program expenses to total expenses

B. total revenues divided by total expenses

C. current assets divided by current liabilities

D. percentage of unrestricted net assets to operating expenses

current assets divided by current liabilities

Which of the following defines an appeal to the public to take action on a legislative matter

A. grass-roots lobbying

B. propaganda

C. lobbying

D. political influence

grass-roots lobbying

The composite financial index (CFI), a measure of financial health for colleges and universities, includes which of the following ratios

A. primary reserve ratio

B. net operating revenues ratio

C. return on the net assets ratio

D. all of these ratios are included in the CFI

all of these ratios are included in the CFI

How would a private college or university report its estimate for uncollectible tuition and fees on its statement of activities

A. a contra-revenue account titled provision for doubtful accounts

B. a direct reduction of tuition and fees - without donor restrictions

C. would not be reported on the statement of activities but would be disclosed in the notes

D. an expense titled institutional support expense

an expense titled institutional support expense

Briar State, a public college, provided tuition waivers of $500,000. Of the amount, $200,000 was for students teaching courses as graduate assistants and $300,000 was simply an award for scholastic accomplishments. Another $100,000 was given for tuition refunds. What amount would Briar State record as Tuition and Fees Discounts and Allowances?

A. $600,000.

B. $500,000.

C. $400,000.

D. $300,000.

300,000

Which of the following measures may be useful to decision makers evaluating the financial condition of a college or university

a. number of graduates

b. composite financial index

c. faculty productivity

d. graduation rate

composite financial index

Which of the following is a typical classification of a functional expense in a college or university

A. academic wages and benefits

B. student support

C. Institutional support

D. depreciation

institutional support

State educational appropriations received by a public university are classified as which of the following on the statement of revenues, expenses, and changes in net position?

A. Nonoperating revenue.

B. Operating revenue.

C. Other financing source.

D. Increase in unrestricted net position.

nonoperating revenue

Which of the following is not a classification of revenues for a college or university as recommended by the National Association of College and University Business Officers (NACUBO)?

A. Sporting events.

B. State appropriations.

C. Investment income.

D. Contributions.

sporting events

During the year ended June 30, 2023, Thompson College, a private college, received a federal government grant of $800,000 for research on the role of music in improving math skills for students. Expenses that were not capital in nature for this research amounted to $100,000 during the same year. Under FASB standards, which of the following best represents how Thompson College would report this nonexchange transaction in the net assets section for the year ended June 30, 2023?

A. $0, $800,000

B. $0, $700,000

C. $100,000, $700,000

D. $800,000, $0

$0, $700,000

How would estimated uncollectible tuition and fees be reported on the financial statements of a university?

It would be reported as part of net revenue by a public university.

It would be reported as an expense by a public university.

It would be reported as an expense by a private university.

A. I only.

B. II only.

C. III only.

D. Both I and III are correct methods of reporting estimated uncollectible tuition and fees.

both I and III are correct methods of reporting estimated uncollectible tuition and fees

During the years ended June 30, 2023 and 2024, Main University, a private university, conducted a cancer research project financed by a $1,000,000 gift from an alumnus. The entire amount was pledged by the donor on July 10, 2022. The gift was restricted to the financing of this particular research project. During the two-year research period, Main's gift receipts from the alumnus and research expenses related to the research project were as follows for each fiscal year (FY):

FY 2023 | FY 2024

Gift receipts

$ 200,000 | $ 800,000

Cancer research expenses

$ 100,000 | $ 900,000

What amount of net assets was released from restriction in 2023?

A. $200,000

B. $100,000

C. $1,000,000

D. $0

$100,000

An alumnus donates securities to a private college and stipulates that the principal be held in perpetuity and income from the securities be used for faculty travel. Dividends received from the securities should be recognized as increases in:

A. Endowments.

B. Net assets without donor restrictions.

C. Deferred revenue.

D. Net assets with donor restrictions.

net assets with donor restrictions

Which of the following statements is required for both a private university and a governmentally owned public university engaged only in business-type activities?

A. Statement of cash flows.

B. Statement of net position.

C. Statement of activities.

D. Statement of revenues, expenses, and changes in net position

statement of cash flows

Colleges and universities often make loans to students. How would these loans be reported on the financial statements?

A. An expense.

B. A receivable.

C. A liability.

D. An investment.

a receivable

Which of the following is required as part of a complete set of financial statements for a public college or university engaged only in business-type activities?

A. Statement of changes in operations.

B. Statement of revenues, expenses, and changes in net position.

C. Statement of activities.

D. Statement of functional expenses.

statement of revenues, expenses, and changes in net position

A college has collected returnable dormitory room deposits from students. How would these deposits be reported by the college?

A. A current liability.

B. Unrestricted revenue.

C. Restricted revenue.

D. A long-term liability.

a current liability

The FASB requires that private colleges and universities prepare which of the following financial statements?

A. A statement of net position.

B. A statement of net changes in financial position.

C. A statement of activities.

D. The FASB requires private colleges and universities to prepare all of the above statements.

a statement of activities

Which of the following receipts can properly be accounted for as an increase in net assets without donor restrictions by a private college?

A. Student tuition and fees.

B. Gift from an alumnus for a new college of business building.

C. Federal grant for genetic research.

D. Acceptance of assets, the income from which will be paid to the donor.

student tuition and fees

A private college would report which of the following assets differently than a public college?

A. Land.

B. Intangible assets.

C. Collections.

D. Equipment.

intangible assets

What type of college or university must report expenses by both natural classification and functional classification?

A. Both private and public colleges and universities.

B. Private colleges and universities.

C. Public colleges and universities.

D. Neither private nor public colleges and universities.

private colleges and universities

The most common funds used by private colleges and universities include all of the following except:

A. Plant funds.

B. Loan funds.

C. Sustainable funds.

D. Endowment funds.

sustainable funds

Colleges and universities can be

true

an example of a college performance metric would be

true

the college scorecard allows

true

only public colleges and universities are

false

colleges and universities will report

true

financial reporting standards for all hospitals are

false

patient service revenues

false

in accounting for governmental health care

false

an implicit price concession exists if it is

true

not for profit hospitals are

false

not for profit hospitals risk

true

payment methods

true

under GAAP

false

a governmental not for profit health care entity would

true

all health care organizations report

false

asset limited as to use asets

true

Which of the following is not a financial statement prepared by nongovernmental not-for-profit health care entities?

A. Statement of changes in net assets.

B. Statement of revenues, expenses, and changes in net assets.

C. Balance sheet.

D. Statement of cash flows.

statement of revenues, expenses, and changes in net assets

Contractual adjustments that arise from differences between the gross charge for patient services and the amount paid by a third party payor are reported as:

A. Deductions from gross patient revenue in arriving at net patient revenue.

B. Disclosures in the notes to the financial statements.

C. Either deductions from gross patient revenue or disclosure in the notes, depending on the dollar amount of the adjustments relative to billings.

D. Bad debt expense

deductions from gross patient revenue in arriving at net patient revenue

Which of the following statements is true about diagnosis-related groups (DRGs)?

A. DRGs are the basis for a cost accounting method that groups costs together by departments performing the services.

B. A DRG is a case-mix classification scheme that is used to determine the payment provided to the hospital for inpatient services, regardless of how much the hospital spends to treat a patient.

C. The federal Medicare system of retroactive payment for services depends on DRGs.

D. The DRGs method is the prevailing practice of billing third-party payors for a health care organization's average cost for providing care for locally defined similar medical conditions.

A DRG is a case-mix classification scheme that is used to determine the payment provided to the hospital for inpatient services, regardless of how much the hospital spends to treat a patient.

Which of the following is a primary source of revenue for most hospitals?

A. Nonexchange transactions, such as contributions.

B. Exchange transactions, such as fees for services.

C. Investment income.

D. Capitation fees from health maintenance organizations.

exchange transactions, such as fees for services

A hospital originally recorded all patient services it provided as a $500,000 debit to accounts receivable. Upon review the hospital determined that a contractual adjustment of $200,000 needs to be made, and estimated bad debts of $5,000 need to be recorded. In addition, at the time the receivable was recorded the hospital did not realize $100,000 should be considered charity services. Based on the information provided, what is the net amount of accounts receivable that the hospital would report on its financial statements?

A. $495,000

B. $300,000.

C. $200,000.

D. $195,000.

$195,000

Charity service and bad debts in a government hospital that follows business-type accounting are:

A. Both reported as deductions from gross patient revenue in arriving at net patient revenue.

B. Both reported as expenses.

C. Reported differently, with charity service disclosed in the notes to the financial statements and bad debts reported as a deduction from revenue.

D. Reported differently, with charity service reported as a deduction from gross patient revenue and bad debts reported as an expense.

Reported differently, with charity service disclosed in the notes to the financial statements and bad debts reported as a deduction from revenue.

Which of the following could be included in the performance indicator measure provided by a nongovernmental not-for-profit hospital?

A. Contribution to an endowment.

B. Gain on sale of equipment.

C. Grant restricted for diabetes research.

D. Interest income that is donor restricted

gain on sale of equipment

Contractual Adjustments is properly characterized as:

A. An expense.

B. An other financing use.

C. A liability.

D. A contra revenue

a contra revenue

In accordance with the FASB Codification, donated medicines that normally would be purchased by a hospital should be recorded at fair value and credited to which of the following?

A. Net Patient Service Revenue.

B. Other Revenue.

C. Nonoperating Gains.

D. Deferred Revenues.

other revenue

How would the cash acquisition of equipment be reported on a health care entity's statement of cash flows?

A. Investing activity applying GASB standards.

B. Investing activity applying FASB standards.

C. Financing activity applying FASB standards.

D. Operating activity applying GASB standards

investing activity applying FASB standards

Where would a capitation fee be reported on a health care entity's financial statements?

A. Service revenue.

B. Other professional expense.

C. Other revenue.

D. Short-term liability.

service revenue

All of the following laws were instituted by Congress in part to aid in detection and punishment of fraud and illegal acts except:

A. Health Insurance Portability and Accountability Act (HIPAA) of 1996.

B. False Claims Act.

C. Healthcare Fair Reporting Act.

D. Stark Laws.

healthcare fair reporting act

Which of the following reduce net patient service revenue for not-for-profit hospitals?

A. The cost of malpractice claims that can be reasonably estimated and will probably have to be paid.

B. Implicit price concessions for individual payors.

C. Uncollectible amounts determined to be bad debts.

D. Amounts determined to be charity care that have not previously been billed.

implicit price concessions for individual payors

Which of the following would be considered service revenue of a health care entity?

A. Revenue from the hospital cafeteria.

B. Capitation fees received from a health maintenance organization.

C. Fee revenue received for providing medical transcripts.

D. Revenue received for the rental of an assisted living facility's conference room to a local not-for-profit.

capitation fees received from a health maintenance organization