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Chapter 12.docx - Rhonda Tomlin 1 a Charity care is not...

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Rhonda Tomlin 1. a. Charity care is not recorded as revenue and no entry is required but enclose it in the notes. b. Bad debt for current period are provision for uncollectible accounts and represents cost of extending credit. It is classified as an operation expense in the Statement of Operation c. Contractual adjustments are adjustments arise when third party payors such as insurance companies pay a health care organization less than the customary and normal charge for services provided to patient covered by the insurance or government program. They are estimated at the time of service and are reported as contra- revenue in Statement of Operations. 2. a. Property, plant and equipment are acquired using unrestricted resources and could be recorded as fixed assets in either unrestricted or temporarily restricted. If recorded in the temporarily restricted it will be necessary to reclassify net assets to temporarily restricted in the amount of acquisition cost.
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