Which of the Following Is Not Correct with Respect to Reporting

question 1

Multiple Choice

Which of the following is not correct with respect to reporting of patient service revenue for health care organizations?

• A) Patient service revenue must be reported net of estimated adjustments for contractual adjustments.
• B) Patient service revenue does not include amounts representing charity care.
• C) Changes to estimates of contractual adjustments related to prior periods must be reported as a prior period adjustment if material.
• D) Unrestricted bequests and investment income for current unrestricted purposes may be reported as either operating or nonoperating revenue, depending on the policy of the entity.

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Definitions:

Safety Margin

The difference between the actual level of sales or production and the break-even point, measuring the cushion a company has before it incurs losses.

Break Even Point

The financial analysis term where total revenues equal total expenses, and there is no profit or loss.

Budgeted Revenue

The amount of income that a company plans or expects to generate over a certain period, often used for planning and performance evaluation purposes.

After-Tax Profit

The net income a company generates after all taxes have been deducted from total revenues.