Author Question: A form of balance sheet that lists the assets at the left and the liabilities and owner's equity at ... (Read 215 times)

madam-professor · **on:** Jul 5, 2018

A form of balance sheet that lists the assets at the left and the liabilities and owner's equity at the right is called a report form of balance sheet.
a. True
b. False
Indicate whether the statement is true or false

Question 2

After it prepares its financial statements, a hospital has historically received malpractice claims for events occurring before the balance sheet date.

How should the hospital handle these incurred but not reported (IBNR) claims its financial statements?
a. take no action until it actually receives claims.
b. disclose, in the notes to its financial statements, that it historically receives IBNR claims; state that no estimate can be made of probable loss because no claims have been filed
c. estimate, based on past experience, the amount of probable loss on IBNR claims; report this amount in the notes
d. estimate, based on past experience, the amount of probable loss on IBNR claims; report this amount as an expense and a liability