Which of the Following Is True Regarding Accounting and Financial

question 80

Multiple Choice

Which of the following is true regarding accounting and financial reporting for not-for-profit health care organizations?

• A) Charity care is reported as operating revenue.
• B) Contractual adjustments with insurance companies are reported as an operating expense.
• C) Both of the above.
• D) Neither of the above.

---

Definitions:

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations using its current assets.

Cash Flows

The inflows and outflows of cash and cash equivalents for a company.

Comparable Companies

A method of valuation which involves comparing the economic ratios of a company to those of its peers within the same industry in order to evaluate its financial health and determine its market value.

Ratios

Quantitative measurements that show the relationship between two numerical values or financial figures, often used to analyze companies' financial health.