Which of the following is correct with respect to the recording of charity care for health care organizations?

Question

Quizplus · Accepted Answer

Charity care is not recorded as revenue because it is not expected to be collected. Instead, related expenses are included with other expenses on the Statement of Operations. This is in accordance with generally accepted accounting principles (GAAP) and ensures that financial statements accurately reflect the organization's financial position and activities. Choice A is incorrect because charity care cannot be recognized as revenue, and an adjustment cannot be made to reflect the difference between revenue and expenses incurred for providing health care services. Choice C is incorrect because foregone charity care revenue cannot be deducted as a charitable contribution because it does not represent an actual expenditure of funds or other assets by the organization. Choice D is incorrect because the disclosure of charity care policies and activities is required by accounting and regulatory standards.

Which of the Following Is Correct with Respect to the Recording