Case Study for Healthcare Accounting Your organization has a fiscal year that en

Question

Case Study for Healthcare Accounting

Your organization has a fiscal year that ends Dec. 31 . You are responsible for the accounting that includes overseeing the administration of contracts with consumers to perform services. The contracts are usually signed Dec. 1 and are a year in length. Accounting principles require your organization to record the revenue for the contract for one month only, the month of December. The remainder of the revenue is recognized on next year’s financial statements. However, management instructs you to record the entire amount of the contract in December to boost revenues for the current year end. You know that management will receive a bonus for the boosted revenue and you are likely to receive recognition for doing this in an upcoming performance review. How do you handle this situation?

Explanation / Answer

Managed care contracts are an essential part of healthcare organization with regard to financial support. This situation can be handled by following measures.

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