A13 Twatt - classified as expenses. And the way in which...

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Chapter 17 Tiffany Watt Assignment: A13 April 27, 2011 AC 325 – E01   Questions 17-4. Since charity service is never expected to result in cash flows, it is neither recognized as revenue nor receivables nor bad debt expense. If the health care organization does not pursue collection of amounts determined to qualify as charity care, they are not reported as revenue. However, management’s charity care policies and the level of care provided should both be disclosed within the notes. Contractual adjustments (or allowances) are recorded as contra-revenue accounts (i.e., reductions of revenue and receivables) for the difference between the gross patient service revenue and the negotiated payment by third-party payors in arriving at net patient service revenue. Bad debts are
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Unformatted text preview: classified as expenses. And the way in which bad debts are reported is the sole difference between not-for-profit and governmental recognition. 17-7. Assets limited as to use refers to unrestricted assets whose use is limited by the governing board or contracts or agreements with outside parties other than donors or grantors. Examples include proceeds of debt issues; funds deposited with a trustee; self-insurance funding arrangements; and statutory reserve requirements. By contrast, restricted assets may include those assets whose use is limited by either the donor or grantors restrictions or through contracts/agreements with outside parties as well. Exercises & Problems 17-1. Multiple Choice. 1. D 2. B 3. A 4. D 5. D 6. B 7. B 8. D 9. A 10. C...
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This note was uploaded on 09/01/2011 for the course BUSINESS 101 taught by Professor - during the Spring '11 term at Mississippi Valley State University.

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