[Anonymous]

Terry, an auditor, is performing test work for a private not-for-profit hospital. Listed below are components of the statement of operations:

Revenue for charity care services $100,000

Bad debt expense 70,000

Net assets released from restrictions

used for operations 50,000

Other revenue 80,000

Net patient service revenue (includes revenue

related to charity care) 500,000

What amount would be reported as total revenues, gains, and other support on the statement of operations?

A.$460,000

B.$530,000

C.$580,000

D.$630,000

Correct answer is B

My answer is A. The difference between mine and correct answer is bad debt expense.

I remembered I did one MCQ and the correct answer put bad debt expense on provision for contractual and adjustment

So I am really confused now about how to classify bad debt expense in statement of operation ?

Is it in provision for contractual and adjustment or operating expense ?

Can anyone shed some light on this one

Thanks!

[Meeekks]

They're asking for the revenue, not the income.

[Author]

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