CH 17 Sol - partial

CH 17 Sol - partial - CHAPTER 17: ACCOUNTING FOR HEALTH...

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Unformatted text preview: CHAPTER 17: ACCOUNTING FOR HEALTH CARE ORGANIZATIONS Answers to Questions 17-2. SFAS No. 117 requires health care providers to issue a statement of financial position, statement of operations, and a statement of cash flows, as well as notes to the financial statements. Additionally, information concerning changes in equity is to be included in the statement of activities or in a separate statement of changes in equity. Considerable discretion is allowed in presenting financial information. Governmental health care organizations that engage in business-type activities provide a statement of net assets (balance sheet); statement of revenues, expenses, and changes in net assets; a statement of cash flows; and notes to the financial statements. 17-4. The AICPA's Audit and Accounting Guide Health Care Organizations requires that patient discounts and contractual adjustments be netted against gross patient revenue in arriving at net patient revenue. The provision for bad debts is reported as an operating expense. Charity service is not reported on the statement of operations; however, the amount, as well as management’s policies regarding charity service, must be disclosed in the notes to the financial statements. The one difference between not-for-profit organizations and governmental organizations is in the recognition of bad debts. The GASB requires that any provision for bad debt be netted against patient revenue (i.e., a provision for bad debts is considered a contra-revenue not an operating expense). debts is considered a contra-revenue not an operating expense)....
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This note was uploaded on 04/12/2011 for the course ACCT 2500 taught by Professor Johnmalone during the Fall '08 term at Cuyahoga CC.

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CH 17 Sol - partial - CHAPTER 17: ACCOUNTING FOR HEALTH...

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