NFP Flashcards

(1 cards)

1
Q

Listed below are components of the statement of operations for Sisters of Loving Mercy, a private, not-for-profit hospital:

Net patient service revenue (includes
revenue related to charity care) $847,000
Net assets released from restrictions
used for operations 72,000
Revenue for charity care services 285,000
Other revenue 109,000
Bad debt expense 54,000
What amount would be reported as total revenues, gains, and other support on the statement of operations?

A

Total revenues, gain, and other support will include the following:

Net patient service revenue $847,000
Less: Charity care 285,000 $562,000
Other revenue 109,000
Net assets released from restrictions 72,000
Total $743,000
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Charity care does not qualify for recognition as revenues in the financial statements. These are services provided without expectation of payment. The bad debt expense would not affect the patient service revenue reported by a private not-for-profit hospital. In contrast, uncollectible patient accounts would reduce patient services revenues reported by governmental hospitals. Net assets released from restrictions appear as revenues as they increase one set of net assets through reclassification.

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