The Difference Between the Financial Statements of Private Not-For-Profit Hospitals

question 9

Multiple Choice

The difference between the financial statements of private not-for-profit hospitals and private not-for-profit voluntary health and welfare organizations is:

• A) Voluntary health and welfare organizations do not have to prepare a Statement of Cash Flows.
• B) Hospitals do not have to prepare a Statement of Functional Expense.
• C) Both a and b above.
• D) Neither a nor b above.

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Definitions:

Profit-Maximizing Output

This term refers to the level of production at which a business achieves the greatest profit, where marginal cost equals marginal revenue.

Market Price

The current price at which a good or service can be bought or sold in a given market, determined by supply and demand.

Units

Measurements or quantities of a product or service.

Short-Run Costs

Costs that vary with the level of output in the short term, where at least one factor of production is fixed.