Contractual Adjustments That Arise from Differences Between the Gross Charge

question 16

Multiple Choice

Contractual adjustments that arise from differences between the gross charge for patient services and the amount paid by a third party payor are reported as:

• A) Deductions from gross patient revenue in arriving at net patient revenue.
• B) Disclosures in the notes to the financial statements.
• C) Either deductions from gross patient revenue or disclosure in the notes, depending on the dollar amount of the adjustments relative to billings.
• D) Bad debt expense.

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Definitions:

Indifference Curve

A curve showing the different combinations of two products that yield the same satisfaction or utility to a consumer.

Budget Line

A graphical representation of all possible combinations of two goods that a consumer can afford with their income at current prices.

Consumer Demand Curve

A graphical representation showing the quantity of a product that consumers are willing and able to purchase at various price levels.

Marginal Utility

The additional satisfaction or utility gained by consuming one more unit of a good or service.