Which entry would be the correct entry to record that a hospital has provided patient services for $200,000, of which 25% will be billed to a third party? DEBIT CREDIT
A) Accounts Receivable-Patients $200,000 Patient Service Revenue $200,000
B) Accounts Receivable-Patients $150,000 Patient Service Revenue $200,000 Accounts Receivable-Third Party $50,000
C) Accounts Receivable-Patients $50,000 Accounts Receivable-Third Party $150,000 Patient Service Revenue $200,000
D) Accounts Receivable-Patients $200,000 Patient Service Revenue $50,000 Accounts Receivable - Third Party $150,000
E) Patient Service Revenue $200,000 Accounts Receivable-Patients $150,000 Accounts Receivable-Third Party $50,000

Question

Quizplus · Accepted Answer

Option B is the correct entry to record the hospital's services. The hospital provided patient services for $200,000, of which 25% ($50,000) will be billed to a third party. Therefore, the hospital will bill patients for $150,000 (75% of $200,000) and bill the third party for $50,000. This can be recorded by debiting Accounts Receivable-Patients for $150,000 and Accounts Receivable-Third Party for $50,000 and crediting Patient Service Revenue for $200,000.

Which Entry Would Be the Correct Entry to Record That