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1. Which of the following reflects the fundamental accounting equation (or balance sheet equation) in a not-for-profit, business-oriented healthcare organization?
A) Equity = Liabilities + Assets
B) Assets = Long-term Debt + Equity
C) Assets = Liabilities + Net Assets
D) Net Assets = Liabilities + Assets
2. If an organization’s Board of Directors were to set aside assets to be used for replacement of plant and equipment, where would this be reflected on the balance sheet?
A) Assets Limited as to Use
B) Temporarily Restricted Net Assets
C) Permanently Restricted Net Assets
D) Liability
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