Explain whether each of the following would usually be used in a computerized accounting system and why or whynot. 1 . special journals 2 . accounts receivable control accounts 3 . electronic invoice form 4 . month-end postings to the general ledger
Question 2
A hospital that carries no malpractice insurance has several outstanding malpractice claims, including one for 1.5 million.
Hospital attorneys believe the claim can be settled in the range of 200,000 to 340,000, but negotiations have not reached the point where they can estimate where within that range they can reach agreement. How should the hospital handle this claim in its financial statements?
a. report nothing on the face of the statements; in the notes, state that there are claims against the hospital, and that historically it wins some cases and loses others.
b. report an expense and a liability of 270,000, the mid-point of the range.
c. report an expense and a liability of 340,000, the upper end of the range.
d. report an expense and a liability of 200,000, the lower end of the range, and disclose the potential for additional loss in the notes to the statements.