Saudi Electronic University

HCM 213

Chapter 3

Multiple Choice

1)Transactions summarized by account are called:

1. 1. Journal
   2. Ledger
   3. Balance
   4. Asset
2. Which of the following is a standard accounting method used in health care?
   1. Accrual

2. 2. Cash
   3. Expense
   4. Asset
3. Rules for recording transactions do not include:
   1. Increase in revenues, gains or other support account when earnings are received.
   2. After each transaction, the fundamental account equation must be in balance.
   3. An accounting method when cash was received or expended.
   4. Increase an expense account when an asset is used.
4. To develop financial statements, transactions
   1. Must be on a cash basis
   2. Are recorded according to staff availability
   3. Focus only on assets
   4. Have been analyzed and recorded
5. Statement of Operations includes:
   1. Operating Expenses
   2. Increase in unrestricted net assets
   3. a & b
   4. None of the above
6. A statement of cash flows includes:
   1. Cash flows from operating activities
   2. Cash flows from investing activities
   3. Cash flows from financing activities
   4. All of the above
7. The “book” refers to transactions
   1. Only done by computer entry
   2. Journal recorded chronologically
   3. Current balance in each account
   4. Current ratio

8. In the accrual accounting method:
   1. Revenues are recognized when cash is received
   2. Expenses are recognized when cash is paid out
   3. Revenues are recognized when revenues are earned
   4. All of the above
9. Functions of an internal audit department include:
   1. Resources used to generate revenues
   2. Ensuring that hospitals comply with their financial record keeping
   3. Reporting and recording of revenues and expenses
   4. b & c
10. Recording transactions assists in:
    1. Accuracy of financial acts
    2. Summarizing accounts
    3. Ease of tracking financial transactions
    4. All of the above

True or False

1. Transactions are recorded chronologically in a journal. True or False?

2. In health care the cash accounting method is used. True or False?

3. Recording of transactions is to occur each quarter. True or False?

4. Under accrual accounting, revenues are recognized when cash is received. True or False?

5. When cash is paid out, expense is recognized where no resources were used. True or False?

6. A statement of cash flows provides information about how much revenue e is generated and amount of resources used. True or False?