[Ana]

This same MCQ appears in both Becker and Ninja yet each have a different answer. Which is right? Becker says B and Ninja says A. I feel like this happens often.

Hospital, Inc., a not-for-profit entity with no governmental affiliation, reported the following in its accounts for the current year ended December 31:

Gross patient service revenue from all services provided
at the established billing rates of the hospital (note
that this figure includes charity care of $25,000) $775,000
Provision for bad debts 15,000
Difference between established billing rates and fees
negotiated with third-party payers (contractual adjustments) 70,000

What amount would the hospital report as net patient service revenue in its statement of operations for the current year ended December 31?
A.

$665,000
B.

$680,000
C.

$705,000
D.

$735,000

[Bourne]

This has been posted in a couple other forums with not many answers. I believe the Wiley test bank shows the correct answer as B as well. Interesting to find out which is correct.

[Ana]

I didn't know that, thanks. I just see so many inconsistencies even throughout Becker. It's so frustrating because it maybe the difference between a 73 or 75 on the test.

[Bourne]

This explanation lays it out if it is correct:

https://www.another71.com/cpa-exam-forum/topic/far-review-question-please-help/

It'd be nice if Jeff could pitch in and explain which is correct.

[jeff]

Similar post – I believe NINJA is correct and provided support for that: https://www.another71.com/cpa-exam-forum/topic/is-ninja-or-becker-correct-ninja-far-question-1352/

Jeff Elliott, CPA (KS) | Another71 | NINJA CPA | NINJA CMA | NINJA CPE

[Author]

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