To close the income summary account with a credit balance, debit ...

[Caiter2013]

To close the income summary account with a credit balance, debit the account for its balance and credit the drawing account.
 a. True
   b. False
   Indicate whether the statement is true or false

Question 2

A not-for-profit hospital provided charity care. The value of the hospital's service for the year, at its normal billing rates, was 4 million. How should the hospital report the charity care services in its financial statements?
 
  a. include the 4 million as part of patient service revenue and report an operating expense (labeled Charity care) of 4 million.
  b. in the revenue section of the operating statement, include the 4 million as part of patient service revenue, but also show a deduction (labeled Charity care) for 4 million.
  c. report nothing for charity care, neither on the face of the operating statement nor in the notes
  d. report nothing on the face of the operating statement for charity care. In the notes, describe the charity care policy, and disclose the level of charity care provided based on the direct and indirect cost of providing the care.

[braelync]

Answer to Question 1

False

Answer to Question 2

d