Hospitals Document Reserves as That Portion of the Accounts Receivables

question 39

Multiple Choice

Hospitals document reserves as that portion of the accounts receivables that they hope to collect but have some doubt about its collectability. Rather than book these amounts as income, hospitals will "____________" These amounts until paid.

• A) Bad debts
• B) Reserve
• C) Income expense
• D) All (Allowance for loans and lease losses)

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Definitions:

Cash-Out Combination

A financial strategy involving the refinance of a mortgage by taking out a loan that is larger than the existing one, providing the borrower with cash from the equity built up in the property.

Fairness

implies impartial and just treatment or behavior without favoritism or discrimination.

UCC

The Uniform Commercial Code, a comprehensive set of laws governing commercial transactions in the United States, intended to harmonize the law of sales and other commercial transactions across U.S. states.

Inventory

The complete list of items such as goods, materials, and merchandise that a business holds with the intent to sell.