Explain the Different Ways Hospitals Are Classified

question 23

Essay

Explain the different ways hospitals are classified.

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Definitions:

Net Method

An accounting approach where discounts for early payment are assumed to be taken and thus are deducted from the cost of purchases.

Accounts Payable

Short-term liabilities representing amounts owed to suppliers or creditors for goods and services received.

Non-Interest-Bearing Note

A promissory note with no interest charged on the principal; repaid at its face value at maturity.

Discount on Note Payable

The difference between the face value of a note payable and its issue price when the note is sold for less than its face value, effectively acting as an interest expense over time.