HAC HAC Healthcare Supply Chain & Inventory Accounting

Question 1

Under GAAP, which inventory valuation method is prohibited for US publicly reported healthcare entities that also report under IFRS?

Accepted Answer

LIFO (Last-In, First-Out)

Answer

IFRS prohibits the LIFO method for inventory valuation, so entities that must comply with both US GAAP and IFRS cannot use LIFO.

Question 2

A hospital's supply charge master lists an item at $45, but the vendor invoice shows $42. Under the lower-of-cost-or-net-realizable-value rule, what is the correct balance sheet value?

Accepted Answer

$42.00

Answer

ASC 330 requires inventory to be recorded at the lower of cost or net realizable value; since actual cost ($42) is lower than the list price, $42 is used.

Question 3

Which type of supply cost in a hospital is BEST classified as a direct supply cost rather than overhead?

Accepted Answer

Surgical implants used in a specific patient procedure

Answer

Surgical implants traceable to a specific patient procedure are direct supply costs because they are directly attributable to patient care delivery.

Question 4

A healthcare supply chain manager uses an economic order quantity (EOQ) model. Which two costs does EOQ balance to minimize total inventory cost?

Accepted Answer

Ordering cost and carrying (holding) cost

Answer

EOQ minimizes total inventory cost by finding the order quantity where the sum of ordering costs (per order placed) and carrying costs (cost to hold inventory) is lowest.

Question 5

When a hospital writes down expired pharmaceutical inventory to zero, which financial statement is directly impacted?

Accepted Answer

Income statement (supply/inventory expense increases) and balance sheet (inventory decreases)

Answer

A write-down of inventory increases expense on the income statement and reduces the carrying value of inventory on the balance sheet simultaneously.

(HAC) Healthcare Accounting Certification Practice Test

(HAC) Healthcare Accounting Certification Practice Test

HAC HAC Healthcare Supply Chain & Inventory Accounting