Hcs/403

* Relationship between revenue sources and expenses on Patton-Fuller’s financial performance

* What is the effect of revenue sources on financial reporting at the hospital?

* How are the hospital’s revenues and expenses grouped for planning and control?

What is the Effect of Revenue Sources on Financial Reporting at the Hospital?

The hospitals main source of revenue is from patients, the effect of the revenue sources on the financial reporting at Patton-Fuller Community Hospital center around the fact the hospital has entered into new third-party payment agreements which means in some instances the hospital will not get paid for the full amount of the services they have billed. Therefore, the net patient revue being reported is estimated. The hospital has a significant number of their patients who fall under Medicare and Medicaid as third party providers, which the hospital realizes as a significant risk as it relates to possible bad debt which is reported on the financial statement as doubtful accounts and patient account receivables (University of Phoenix, Health care finance).

How are the Hospital’s Revenues and Expenses Grouped for Planning and Control?

Financial budgeting is crucial in running an organization efficiently. For managers to effectively plan and control their budget, they group revenues and expenses into different categories. By grouping revenues and expenses managers can match cost against revenues according to established criteria set by the hospital. Patton-Fuller Community Hospital grouped their revenues and expenses into two categories for planning and control. Those two categories are net patient revenue and other revenue. The hospital expenses are grouped by both variable and fixed cost. The variable cost would include salaries and benefits, supplies, physician and professional fees, depreciation and amortization, interest, other, and provision for doubtful accounts. The fixed cost would include utilities. Comparing and...