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Upon writing off the remaining accounts receivable balance of $3,000 on a $9,000 bill on December 31, 2016, a clinic received $500 toward payment on the account on Feb 10, 2017. The letter attached to the check indicated that the estate of Patient X had been probated and final disbursements from the estate were being made to the known creditors. Your accountant has deposited the $500 check and has indicated that the check would be recorded to the non-operating income account. You are the Hospital’s auditor and have come across this transaction during a review of the March 2017 financial statements. Is this transaction correct? If not, describe the process of how you would have received this payment.

Financial Management, Finance

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