What is the appropriate account to debit when reducing net patient service revenue as a result of arrangements with third party payors?
A) Contractual Adjustments.
B) Allowance for uncollectible and reduced accounts.
C) Patient Service Revenues.
D) Account Receivable-Patients.
E) Accounts Receivable-Third Party.

Question

Quizplus · Accepted Answer

Contractual adjustments represent the portion of gross patient service revenue that the hospital has agreed to forgo due to contractual agreements with third-party payors. Therefore, reducing net patient service revenue as a result of arrangements with third-party payors would require debiting the Contractual Adjustments account.

What Is the Appropriate Account to Debit When Reducing Net