C is corrent. According to the AICPA Audit and Accounting Guide, Health Care Organizations, the basic financial statements for a hospital include a balance sheet, a statement of operations, a statement of changes in net assets, and a statement of cash flows. Accordingly, Elizabeth Hospital should prepare both a statement of changes in net assets as well as a statement of operations.
A is incorrect because both statements are required.
B is incorrect because a statement of operations is required.
D is incorrect because a statement of changes in net assets is required.
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