A physician performs medical services for a patient on October 20; the total bil

Question

A physician performs medical services for a patient on October 20; the total bill for the medical services was $200. The patient makes a co-pay of $20 on October 20, and the insurance company pays the remaining balance of $180 on November 19. On what date(s) will the physician record the revenue for those medical services provided on October 20? (Assume the accrual basis of accounting is used.)

a. $200 of revenue on october 20

b. $180 of revenue on october 20 and the remaining $20 on novembar 19

c. $20 of revenue on october 20 and $180 of revenue on november 19

d. $200 of revenue on november 19

Explanation / Answer

Revenue principal under accrual basis of accounting states that revenue should be recognised or recorded when services are rendered and not when cash is received.

In this case, physcian rendered its services on October 20, so it means he has earned $200 on october 20 only. Therefore, physician will record $200 revenue on October 20.

Option A is correct.

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