The Required Reporting for Bad Debts (Amounts Not Likely to Be

The required reporting for bad debts (amounts not likely to be collected) varies between governmental and nonprofit hospitals in the following way:

A) Bad debts are reported as an adjustment of revenue, not as an expense, by governmental hospitals; nonprofits report bad debt expense in limited circumstances
B) Nonprofit hospitals do not calculate bad debts
C) Nonprofit hospitals report bad debt expense but only once it has been 12 months since it provided the services
D) Governmental hospitals report bad debts as charity care, which is only disclosed in the notes to financial statements