Question

Where would a capitation fee be reported on a health care entity’s financial statements?

Answer 1

The capitation fee would be a part of credit side of the profit and loss account in the health's care entity's financial statements.

Given that health care entity want to record capitation fee in it's financial statements.

We are required to answer to the question that how capitation fee is recorded in a health care'sn financial statements.

Financial statements are basically the written records that convey the business activities and the financial performance of a company. The balance sheet gives an overview of assets, liabilities, and shareholders' equity as a snapshot in time.

When a health care entity receives capitation fee it would be recorded on the credit side of the profit and loss account because the capitation fee is a income of the health care entity.

Profit and loss account is an account that records expenses and incomes of the company.Expenses are recorded on debit side and incomes are recorded on credit side of profit and loss account.

Hence the capitation fee would be a part of credit side of the profit and loss account in the health's care entity's financial statements.

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