Question: (Multiple choice-governmental hospital)
1. What are the components of the net position section of a governmental hospital's balance sheet?
a. Unrestricted; temporarily restricted; permanently restricted
b. Assets limited as to use; assets unlimited as to use
c. Net investment in capital assets; restricted; unrestricted
d. Restricted; unrestricted
2. A county hospital receives grants from higher-level governments that must be used to construct and equip a special trauma unit. How should the hospital report the grants in its financial statements?
a. As nonoperating revenues
b. After nonoperating revenues (expenses) to arrive at total change in net position
c. As a direct addition to "net investment in capital assets"
d. As an item of extraordinary or special revenue
3. A county hospital receives $1 million from the county's General Fund to help cover the hospital's annual operating deficit. How should the hospital report that receipt of cash?
a. As operating revenues
b. As nonoperating revenues
c. After nonoperating revenues (expenses) to arrive at total change in net position
d. As a direct addition to unrestricted net position
4. A county hospital receives a grant of $250,000 from the State Health Department, which specifies that the grant may be used for any purpose the trustees wish, provided it is used at the rate of $50,000 a year for the next 5 years, starting the following year. How should the hospital report the gift in its financial statements in the year the cash is received?
a. As an advance
b. As revenue in the amount of $250,000
c. As revenue in the amount of $250,000, discounted at the government's borrowing rate over the 5-year period
d. As a direct addition to unrestricted net position
5. How is interest on long-term bonds issued by a county hospital generally reported?
a. As operating expenses
b. As nonoperating expenses
c. As a separate item after nonoperating revenues (expenses) to arrive at total change in net position
d. As a direct reduction of beginning net position