FINANCE

Question 1 In most health care firms, purchasing power gains result because of what reason? Answer A. Monetary assets usually exceed monetary liabilities and inflation exists B. Monetary liabilities usually exceed monetary assets and inflation exists C. Both A and B D. Neither A nor B . 1 points Question 2 True or False? An insurance appraisal is one reasonable source to use for estimating physical assets’ replacement cost. Answer True False . 1 points Question 3 True or False? Depreciation in firms that operate in relatively new physical plants cannot be compared with the unadjusted historical depreciation costs of older facilities. Without financial reporting adjustments, new facilities may appear to have higher costs and thus be less efficient, whereas, in fact, the opposite may be true. Answer True False . 1 points Question 4 True or False? For restating financial statements, monetary items such as cash do not require adjustment because they already reflect current dollars. Answer True False . 1 points Question 5 True or False? In the US, healthcare organizations report their financial statements using constant dollars measured in units of general purchasing power. Answer True False . 1 points Question 6 True or False? Nonmonetary asset accounts must always be restated to the purchasing power as of the current date. Answer True False . 1 points Question 7 True or False? When restating nonmonetary asset accounts, the price index at the current date represents the price index from which the conversion is made, and the price index at the time of acquisition represents the index to which the conversion is made. Answer True False . 1 points Question 8 True or False? When using the constant-dollar method, gains or losses from holding assets must be adjusted. Answer True False . 1 points Question 9 Two major methods of asset valuation are: Answer A. historical cost and future cost B. historical cost and replacement cost C. acquisition cost and future cost D. historical cost and acquisition cost . 1 points Question 10 For restating financial statements to convert to constant dollars, what index is required by the Financial Accounting Standards Board? Answer

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