Question

CH3 6. Give two examples of an Asset. (4) 7. Which of the following is a Short Term Liability? CH3 (4) A. Mortgage Payable B. Bonds Payable C. Accounts Payable D. Notes Payable 8. Which of the following is NOT a Service Line? CH4 (4 Points) A. Long Term Care B. Hospitals C. Home Care D. Medicaid Program CH 3 9. Complete the Accounting equation. (4) Assets - Liabilities = A. Net Worth B. Fund Balance c. Owner's Equity D. All of the Above

Answer 1

6. Examples of assets would include Land and Buildings, Plant and Machinery, Cash and Cash equivalents, Inventory, etc

7. Short term liability are those liabilities payable within a period of 12 months from the current date. Hence Mortgage and bonds may be paid in long term (usually, unless specifically told to be short term). On the other hand, Accounts Payable are usually current liabilities. Hence option C and D.

8. Home care are non-medical sevices and are paid out of pocket. They fall outside the ambit of service line. The other 3 services are connected to the service lines. Hence Option C is right.

9. Assets - liabilities = Net worth (for companies) or Fund balance (for trusts) or Owner's equity (for sole proprieter or companies). Hence all 3 options are right. So D is the right answer.