Advanced Accounting 12th Edition by Joe Ben Hoyle,Thomas Schaefer , Timothy Doupnik

Exercise 45

Mercy for America, a private not-for-profit health care facility located in Durham, North Carolina, charged a patient $8,600 for services. It actually billed this amount to the patient's third-party payor. The third-party payor submitted a check for $7,900 with a note stating that "the reasonable amount is paid in full per contract." Which of the following statements is true
A) The patient is responsible for paying the remaining $700.
B) The health care facility will rebill the third-party payor for the remaining $700.
C) The health care facility recorded the $700 as a contractual adjustment that it will not collect.
D) The third-party payor retained the $700 and will convey it to the health care facility at the start of the next fiscal period.