1. True or False: Under current law, the profits of not-for-profit corporations can be distributed to individuals.

2. True or False: The specific amount of charity care not-for-profit hospitals must provide in order to maintain their tax-exempt status is defined by an existing federal legislative standard.

3. True or False: All prospective payment methods of reimbursement involve a transfer of risk from insurers to providers.

4. True or False: Medicare has a single payment methodology that is applied to all providers, such as hospitals, physicians, and ambulatory (outpatient) surgery centers.

5. True or False: The revenue section of the income statement provides information about the amount of discounts, contractual allowances, and charity care provided by a healthcare organization.

6. True or False: In a healthcare provider organization, net patient service revenue overstates the amount of revenue collected because bad debt expenses have not yet been considered.

7. True or False: Fixed costs are those costs that are known (fixed) regardless of the relevant range, while variable costs are those costs that are known only within the relevant range.

8. True or False: Managerial accounting data typically require assumptions about the future and are therefore more uncertain than financial accounting data.

9. True or False: Through changes to contracts or other operational decisions, it may be possible to convert fixed costs to variable costs or vice versa. 5

10. True or False: An organization with high fixed costs (relative to variable costs) will suffer a greater decrease in profit as volume declines than an organization with high variable costs (relative to fixed costs).

11. True or False Costs that remain constant on a per unit basis but that increase in total as volume increases over a relevant range are referred to as semi-fixed costs.

12. True or False: The classification of costs as direct or indirect depends on the unit (i.e., organization or department) of analysis.

13. True or False: When conducting a cost allocation, costs of a single support department should never be separated into multiple cost pools.

14. True or False: When the cost driver is changed, support department cost allocations to revenue-generating departments will change under the step-down method of cost allocation but not under the direct method of cost allocation.