Health Science Accounting Final

Resources owned by the organization that have physical form.

Tangible Assets

Inventory management is the movement of products in stock and should always use the FIFO method no matter the costing method used.

True

Marketable securities are current assets.

True

Net Realizable Value is based on someone's subjective estimate of what the entity could be sold for.

True

No matter which depreciation schedule is used the journal entries for the initial purchase will remain the same

True

Non-profits have to have CPA audited financial statements

True

Non-profits need to disclose how liquid their organization is.

True

Owners equity and net assets are the same thing in accounting terminology

True

The SEC is concerned with correct arithmetic and consistent accounting practices

True

The SEC is concerned with correct arithmetic and consistent accounting practices.

True

The Statement of Operations and the Income Statement are the same document?

True

The accounting equation must always remain in balance

True

The strength of historical cost valuation is that it is objective and verifiable.

True

There are three ways to pay for an asset.

True

Using the accrual method of accounting will require a Statement of Cash flows.

True

Profits generated from daily operations as well as unrestricted donations

Unrestricted net assests

What are three causes of Demand Inflation?

Wages Incresase, Monopolies and Government Regulation

Historical cost is adjusted each year based on the wear and tear of an item. This adjustment is shown in which account?

depreciation

Internal control means the system is designed to catch and correct errors

automatically

Financial Accounting looks

backward

Accounts receivable net is gross charges less what items?

bad debts and contractual allowance

Which financial statement is a "snapshot" of the organizations financial health?

balance sheet

Rates for different services are called

charges

Using the same information: Given a purchase of new equipment in the amount of $250,000 with a 8 years useful life and $25,000 salvage value Which of the three methods gives you the MOST depreciation expense in the first year?

double declining balance

Managerial Accounting looks

forward

Income earned by organization over the years that was not distributed

retained earnings

Money received or earned for goods or services provided are known as:

revenue

The _____________________ shows where an organization generates its cash and uses it over the accounting period.

statement of cash flows

What is the term for a claim that an outside investor has on an organization.

stockholders equity

Inventory is less liquid than receivables.

True

Amounts individuals have paied directly to the organizations

Contributed Capital

For the most part, all "expenses" are credits in the worksheet.

False

What are the 3 types of cash flows shown on the Statement of Cash Flows?

Operating Financing Investing

There would be a journal entry for : 10/15/20X1 ordered supplies in the amount of $45,000

False

Statements are prepared based on assumption of longevity. If that is not likely the case then it must be disclosed.

Going Concern

The two overriding goals of financial management are [ans1] and [ans2]. Pick 2

profitability and viability

Given the following journal entry: Employees were paid wages of $75,000 during the period there would be a credit to wages and salaries expense account

False

I want to use the future profits valuation to determine how much insurance coverage I should have on an entity

False

If providers give away care (free or charity), they can include the amount they would have charged as revenue.

False

Most undetected fraud is "material" in accounting

False

Net Assets (equity) is the cash an organization has to invest for its future.

False

Nominal accounts are zeroed out after the reporting year has ended.

False

Organizations must always have enough cash on hand to pay off stockholder's equity.

False

Cash accounting would recognize a transaction when:

All choices are correct (Cash paid for supplies, Cash received for service, A loan is taken for new machinery ,Wages are paid)

The users of financial statements are

All choices are correct (investors, stockholders, suppliers, and bankers

Refers to a period of less than one year:

All choices are correct (near-term, short-term, current)

Given: 12/15/2020 10 units @ $13 6/15/2020 10 units @ $9 1/15/2020 10 units @ $5 3/15/2020 20 units @ $7 9/15/2020 20 units @ $11 52 units were sold for $15.50/unit What is the profit difference between LIFO and FIFO methods for this problem?

$112.00

The following purchases were made: 1/15 10 @ $5.00/ea 6/15 15 @ $8.00/ea 12/15 45 @ $14.00/ea 3/15 20 @ $6.00/ea 11/15 30 @ $12.00/ea 9/15 25 @ $10.00/ea Sold 115 units at $25.00/each What is the Cost of Goods Sold using FIFO method?

$1,110.00

The following purchases were made: 1/15 10 @ $5.00/ea 6/15 15 @ $8.00/ea 12/15 45 @ $14.00/ea 3/15 20 @ $6.00/ea 11/15 30 @ $12.00/ea 9/15 25 @ $10.00/ea Sold 115 units at $25.00/each What is the Cost of Goods Sold using the Weighted Average Method?

$1,213.25

Given a beginning inventory of 10 units @ $4/each the following purchases were made: 10 units 3/21 @ $5.00/each11 units 11/14 @ $6.00/each6 units 6/16 @ $5.00/each25 units 2/15 @ $4.50/each5 units 12/15 @ $8/each If 50 units were sold @ $25.00/piece What is the revenue generated?

$1,250

The following purchases were made: 1/15 10 @ $5.00/ea 6/15 15 @ $8.00/ea 12/15 45 @ $14.00/ea 3/15 20 @ $6.00/ea 11/15 30 @ $12.00/ea 9/15 25 @ $10.00/ea Sold 115 units at $25.00/each What is the Cost of Goods Sold using the LIFO method?

$1,360.00

The following purchases were made: 1/15 10 @ $5.00/ea 6/15 15 @ $8.00/ea 12/15 45 @ $14.00/ea 3/15 20 @ $6.00/ea 11/15 30 @ $12.00/ea 9/15 25 @ $10.00/ea Sold 115 units at $25.00/each What is the profit using the LIFO costing method?

$1,515.00

The following purchases were made: 1/15 10 @ $5.00/ea 6/15 15 @ $8.00/ea 12/15 45 @ $14.00/ea 3/15 20 @ $6.00/ea 11/15 30 @ $12.00/ea 9/15 25 @ $10.00/ea Sold 115 units at $25.00/each What is the profit using the FIFO costing method?

$1,765.00

The following purchases were made: 1/15 10 @ $5.00/ea 6/15 15 @ $8.00/ea 12/15 45 @ $14.00/ea 3/15 20 @ $6.00/ea 11/15 30 @ $12.00/ea 9/15 25 @ $10.00/ea Sold 115 units at $25.00/each What is the average price per unit?

$10.55

Given: 12/15/2020 10 units @ $13 6/15/2020 10 units @ $9 1/15/2020 10 units @ $5 3/15/2020 20 units @ $7 9/15/2020 20 units @ $11 52 units were sold for $15.50/unit What is the inventory valuation based on FISH for the year?

$106.00

A piece of equipment was purchased on 1/1/20X1. It has a useful life of 5 years and salvage value of 10%. Accumulated depreciation amounted to $100,000 on 12/31/20X5. What was the purchase price (historical cost) of the item?

$111,111.00

Jerry bought a new tractor for $40,000 for his landscaping business. He thinks it will last him 5 years at which time he will sell if for scrap for $750.00. Using the Double Declining Balance method of depreciation what is his depreciation expense for years 1 and 3 respectively?

$16,000 and $5,760

The following purchases were made: 1/15 10 @ $5.00/ea 6/15 15 @ $8.00/ea 12/15 45 @ $14.00/ea 3/15 20 @ $6.00/ea 11/15 30 @ $12.00/ea 9/15 25 @ $10.00/ea Sold 115 units at $25.00/each What is the FISH value?

$170.00

The following purchases were made: 1/15 10 @ $5.00/ea 6/15 15 @ $8.00/ea 12/15 45 @ $14.00/ea 3/15 20 @ $6.00/ea 11/15 30 @ $12.00/ea 9/15 25 @ $10.00/ea Sold 115 units at $25.00/each What is the Revenue from this transaction?

$2,875.00

Given: 12/15/2020 10 units @ $13 6/15/2020 10 units @ $9 1/15/2020 10 units @ $5 3/15/2020 20 units @ $7 9/15/2020 20 units @ $11 52 units were sold for $15.50/unit What is the inventory valuation using LISH?

$218.00

Given a beginning inventory of 10 units @ $4/each the following purchases were made: 10 units 3/21 @ $5.00/each11 units 11/14 @ $6.00/each6 units 6/16 @ $5.00/each25 units 2/15 @ $4.50/each5 units 12/15 @ $8/each If 50 units were sold @ $25.00/each. Using LIFO what is the cost of goods sold?

$267.00? $111.00? $71.50?

Jones Services bought a new building on 9/15/20X1 for $950,000 with a Salvage Value of $50,000 and Useful Life of 30 years. The land was valued at $275,000. Using the Straight Line method of depreciation what is the book value of the land in 20X5?

$275,000

Given a purchase of new equipment in the amount of $250,000 with a 8 years useful life and $25,000 salvage value what is the straight line depreciation amount per year?

$28,125/year

Given: Purchase of new technology for $65,000 Building remodel for new technology of $230,000 and Sales Tax of 6,500 and Commission of $5,500 what is the historical cost of this item?

$307,000

Given Liabilities of $185,000 and Equity of $205,000 what are Assets:

$390,000

A piece of equipment was purchased for $65,000 on 1/1/20X1 and has a salvage value of 20% and an expected useful life of 10 years. Using the DDB method of depreciation, what is the book value of the item end of year 2 (beginning of year 3)?

$41,600

Given: 12/15/2020 10 units @ $13 6/15/2020 10 units @ $9 1/15/2020 10 units @ $5 3/15/2020 20 units @ $7 9/15/2020 20 units @ $11 52 units were sold for $15.50/unit Using FIFO - what is the COGS for the year?

$412.00

The following purchases were made: 1/15 10 @ $5.00/ea 6/15 15 @ $8.00/ea 12/15 45 @ $14.00/ea 3/15 20 @ $6.00/ea 11/15 30 @ $12.00/ea 9/15 25 @ $10.00/ea Sold 115 units at $25.00/each What is the LISH value?

$420.00

A piece of equipment was purchased for $65,000 on 1/1/20X1 and has a salvage value of 20% and expected useful life of 10 years. What is the straight line depreciation amount per year

$5,200

Given a beginning inventory of 10 units @ $4/each the following purchases were made: 10 units 3/21 @ $5.00/each11 units 11/14 @ $6.00/each6 units 6/16 @ $5.00/each25 units 2/15 @ $4.50/each5 units 12/15 @ $8/each What is the average price per unit of the total inventory that year.

$5.05?

Given a purchase of new equipment in the amount of $250,000 with a 8 years useful life and $25,000 salvage value what is the sum of digits amount of depreciation for year 1?

$50,000

Given that you purchased equipment for $90,000 and then it has depreciated over the years in the amount of $40,000. What is the book value of the equipment?

$50,000

Given an invoice with the terms: 2/12 net 30 for $2600. What would be the cost of missing the deadline? Otherwise known as the interest expense.

$52.00

Given: 12/15/2020 10 units @ $13 6/15/2020 10 units @ $9 1/15/2020 10 units @ $5 3/15/2020 20 units @ $7 9/15/2020 20 units @ $11 52 units were sold for $15.50/unit Using LIFO what is the COGS for the year?

$524.00

Given a purchase of new equipment in the amount of $250,000 with a 8 years useful life and $25,000 salvage value what is the double declining balance depreciation amount for year 1?

$62,500

Using the Sum of Years Digits method find the depreciation in year 3 for the following: Purchase Price: $325,000 Useful Life of 5 years Salvage Value of $5,000

$64,000.00

Again using the same information from the SYD problem Purchase Price: $325,000 Useful Life of 5 years Salvage Value of $5,000 What would be the book value of the item after 3 years of SYD depreciation?

$69,000.00

Given a beginning inventory of 10 units @ $4/each the following purchases were made:10 units 3/21 @ $5.00/each11 units 11/14 @ $6.00/each6 units 6/16 @ $5.00/each25 units 2/15 @ $4.50/each5 units 12/15 @ $8/each If 50 units were sold @ $25.00/each. What is the inventory valuation using FISH?

$71.50

Given: 12/15/2020 10 units @ $13 6/15/2020 10 units @ $9 1/15/2020 10 units @ $5 3/15/2020 20 units @ $7 9/15/2020 20 units @ $11 52 units were sold for $15.50/unit What was the revenue generated over the year?

$806.00

Net Patient Services Revenue is what the organization is legally entitled to collect. Original charges are reduced by:

(All choices are correct) charity care contractual allowances Discounts

The historical cost of an item less the accumulated depreciation of the item is known as:

Book Value

Using the information from the SYD problem Purchase Price: $325,000 Useful Life of 5 years Salvage Value of $5,000 What is the accumulated depreciation through year 3?

....$256,000.00

1. What was the journal entry for #1 2. For #2 there is a debit to what account? 3. For #3 both accounts effected are: 4. For #4 Cash is debited 5. After all transactions the company showed a profit of: 6. Assets increased or decreased over this reporting period 7. Liabilities went up or down during this reporting period? 8. The new Asset total after all transactions is: 9. There is no transaction for #8. 10. Revenue over the reporting period is:

1. Debit A/R $175k Credit RSR $175k 2. Inventory 3. Assests 4 .False 5. $87,500 6. Increased 7. Up 8. $1,016,500 9. True 10. $225,000

The "near term", "short-term" or "current" in accounting means [ ] or less.

12 months

There are how many methods to calculate the Statement of Cash Flows?

2

Given a beginning inventory of 10 units @ $4/each the following purchases were made: 10 units 3/21 @ $5.00/each11 units 11/14 @ $6.00/each6 units 6/16 @ $5.00/each25 units 2/15 @ $4.50/each5 units 12/15 @ $8/each If 50 units were sold @ $25.00/each. Using LIFO what is the cost of goods sold?

267.00

The following purchases were made: 1/15 10 @ $5.00/ea 6/15 15 @ $8.00/ea 12/15 45 @ $14.00/ea 3/15 20 @ $6.00/ea 11/15 30 @ $12.00/ea 9/15 25 @ $10.00/ea Sold 115 units at $25.00/each How many units are left on the shelves?

30

Given a beginning inventory of 150 units the organization bought 750 units and sold 500 units @ $20/each. What is the ending balance?

400

Given a beginning inventory of 150 units the organization bought 750 units and sold 500 units @ $20/each. What is the ending balance?

400 units

Refers to the liquidity of the account

Asset classification

The fundamental accounting equation is:

Assets = Liabilities + Equity

Indicates financial position of an organization at a specific point in time (Snapshot)

Balance sheet

Using cash to purchase an asset like new equipment, is defined as:

Capitalization

Given: $24,000 was collected from previously billed patients. What would be the two accounts effected in this transactions?

Cash and Accounts Receivable

Consideration should be given to risks the organization faces

Conservatism

Use of the same accounting method from period to period

Consistency

The value of what was given up to acquire the item.

Cost

The unit for which we wish to account. This can be a person, department, project, division or organization. It is defined as an:

Entity

GAAP requires the use of historical valuation for which types of assets. There is more than one answer to this question.

Equipment, Plant, Property

A "certified statement" means the documents reviewed are error free and correct

False

A good strategy is to maximize an organizations liquidity and solvency.

False

A system of checks and balances make it easy to defraud and embezzle from an organization

False

An auditor reviews all documents to determine accuracy

False

An auditor reviews all documents to determine accuracy.

False

Cash is increased by a credit and decreased by a debit

False

Cash is increased by a credit and decreased by a debit.

False

Charges are the same as revenues in accounting.

False

Current assets and liabilities at the top of the balance sheet gives the reader a quick assessment of solvency.

False

Depreciation expense and accumulated depreciation are the same in types of accounts in accounting.

False

Depreciation is the same as money in the bank

False

Equity is the amount of money I have in the bank (cash) after I account for my assets and liabilities.

False

Financial statements are the responsibility of the auditor or CPA

False

The 12 month time-frame an organization chooses based on seasonal influences

Fiscal year

Property, plant, and equipment (PP&E)

Fixed assets

Reports should disclose any information needed to ensure that they are fair representations

Full Disclosure

Presents changes in equity of a period of time

Income statement

The ___________________shows revenues and expenses over the entire accounting period.

Income statement

This type of asset results in substantial valuation difficulties because it has no physical form.

Intangible Assets

Given: 12/15/2020 10 units @ $13 6/15/2020 10 units @ $9 1/15/2020 10 units @ $5 3/15/2020 20 units @ $7 9/15/2020 20 units @ $11 52 units were sold for $15.50/unit Which method - LIFO or FIFO gives the better tax advantage to the organization?

LIFO

The idea that one will not be able to replace inventory items for lower costs because of inflation is the basis of which inventory costing method?

LIFO

When using "mark-to-market" valuation which GAAP method is preferred?

Level 1

Obligations of the organization to outside creditors

Liabilities

Refers to whether an account is current or Longterm

Liability Classification

obligations due that will take over a year to repay

Long-term liabilities

Expenses should be recorded in the same period as the revenues they were responsible for generating

Matching

If an individual would make a different decision based on the incorrect information resulting in an error

Materiality

The first item listed on healthcare financial statements and reflects the adjustments of charity care and contractual adjustments is known as:

Net Patient Services Revenue

Based on evidence that reasonable individuals would agree upon

Objective Evidence

Viability is measured by [ans1] and [ans2]. Pick 2

Solvency and Liquidity

Accrual accounting is much less open to manipulation of profits.

True

Accumulated depreciation is a contra-asset account.

True

All stock for an organization should at least be initially issued for the par value to reduce owner liability.

True

Delaying or accelerating payments will not impact expenses if using accrual based accounting.

True

Depreciation expense gets zeroed out after a financial reporting period for an organization.

True

Depreciation is a known "tax shelter" and is completely "legal"

True

Double entry means that it is not possible to change one side of the accounting equation without changing the other

True

Fraud usually makes no difference or impact on an organization's Balance Sheet

True

Fraud usually makes no difference or impact on an organization's Balance Sheet.

True

Stock and bonds that an entity invests in are valued on the balance sheet using which valuation method?

fair value accounting

A _____________________ combines account balances from the beginning of the reporting period as well as journal entries for that recording period.

ledger

________________________ protects owners of a corporation from being personally liable for the debts of the corporation.

limited liability

Assets are presented on the Balance sheet in order of:

liquidity

It takes ____________________ dollars to purchase the same item during times of inflation.

more

Given: Placed an order for a new truck in the amount of $85,000. Entity has applied for a loan in this amount. What are the accounts effected?

no choices are correct (No journal entry because "ordered" means no transcation has taken place)

All elements of a financial event are known as:

transaction