On the Statement of Operations Prepared for a Private,not-For-Profit Hospital,patient

question 94

Multiple Choice

On the statement of operations prepared for a private,not-for-profit hospital,patient service revenue earned during the year is reported net of amounts for which of the following items?
I.Contractual adjustments
II.Bad debts expense

• A)I only
• B)II only
• C)I and II
• D)Neither I nor II

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Definitions:

Section 1221

A section of the U.S. Internal Revenue Code that defines all real and personal property subject to depreciation as assets, excluding inventory.

Trade or Business

Regular, continuous, and substantial activities engaged in by an entity to generate income or profit.

FMV

Fair Market Value; the price an asset would sell for on the open market under current conditions.

Donor's Adjusted Basis

The amount used in determining capital gain or loss for the donor, typically the cost basis adjusted for various factors like improvements or depreciation.