A Physical Therapist Has a Standard Charge of $100 for a Back

question 20

Multiple Choice

A physical therapist has a standard charge of $100 for a back therapy session. A patient makes a co-payment of $20 at the time of service. His insurer sends a payment of $50. Which accounting entry for that payment is correct?

• A) Accounts Receivable $80 credit
• B) Accounts Receivable $50 credit
• C) Medical Services Revenue $50 debit
• D) Medical Services Revenue $20 debit

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Definitions:

Direct Labor Cost

The total cost of wages paid to workers directly involved in the manufacturing or production of goods or services.

Income Statement

A financial report that shows a company's revenues, expenses, and net income over a specific period, highlighting its profitability.

Unit Product Cost

The total cost associated with producing and delivering a single unit of product, including direct labor, materials, and overhead.

Absorption Costing

A financial approach that encompasses all production expenses, such as direct materials, direct labor, and all manufacturing overhead costs, both variable and fixed, into the product's price.