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AHIP Exam AHM-520 Topic 2 Question 84 Discussion

Actual exam question for AHIP's AHM-520 exam
Question #: 84
Topic #: 2
[All AHM-520 Questions]

Under GAAP, three approaches to expense recognition are generally allowed: associating cause and effect, systematic and rational allocation, and immediate recognition. A health plan most likely would use the approach of systematic and rational allocation in order to

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Suggested Answer: B

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Theron
3 days ago
Option B seems like the right approach here. Spreading the sales force commissions over the premium paying period makes sense to match the expense with the related revenue.
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