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MHA 706 FINAL EXAM/ Updated Exam Questions with Correct Answers/ Latest 2024-2024
Financial accounting Answer - involves identifying, recording, and communicating the operation results and status of an organization.
Financial accounting information is conveyed by financial statements- the four most important are: Answer - -Income statement -Statements of changes in equity.-Balance sheet -Statement of cash flows
The point of finance is Answer - understanding the financial data, and then using it to analyze the financial condition of an organization.
Financial accounting information is driven by the need of Answer - outsiders to have reliable information regarding the financial status of an organization.
Financial accounting is important to managers because it provides Answer - -consistent audited view of an organizations financial position -easily comparable to similar organizations
The SEC has legal authority to:
Answer - -regulate the form and content of financial statements 1 / 3
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The SEC relies on these 3 organizations for implementation:
Answer - -Financial Accounting Standards Board (FASB) -Industry Committees of the American Institute of Certified Public Accountants (AICPA) -Principles & Practices Board of Healthcare Financial Management Association (HFMA)
GAAP applies only to:
Answer - -financial accounting statements (as opposed to statements for internal use)
GAAP concepts are broken into 3 categories:
Answer - -Assumptions (4) -Principles (4) -Contraints (2)
GAAP Assumptions (4):
Answer - -Accounting entity: specific entity for statements can be defined.
-Going concern: assumed that the entity will have an indefinite lifetime (not to be liquidated)
-Periodicity: time period applicable to statements can be defined.
Monetary unit: monetary unit of measurement can be defined.
GAAP Principles (4):
Answer - -Historical cost: requires most assets to be values at acquisition, not current value -Revenue Recognition: revenue must be recognized in the period in which they are realizable and earned
-Expense matching: expenses must be match to related revenues
-Full disclosure: statements must contain complete picture of financial events of org.
GAAP Contraints (2):
Answer - -Materiality: only entries that are important to operational and financial status need to be separately identified. 2 / 3
pg. 3 -Cost-Benefit: only relevant info that potential user might find relevant should be reported.
Cash accounting recognizes an event when a Answer - -cash transaction takes place
Accrual accounting recognizes an event when a Answer - -cash obligation is created
chart of accounts corresponds to Answer - unique numeric identifiers to individual accounts (transactions are linked to account numbers.)
journal data is used to create Answer - -income statement -statement of changes in equity -balance sheet -statement of cash flows
income statement has 3 key elements:
Answer - -revenues: cash received & payer obligations
-expenses: resource expenditures required to produce revenues
-Profit= revenues - expenses (yields operating income & net profit)
patient service revenue Answer - -represents the amount based on payer contracts as opposed to charge master prices -include only fee-for-service (FFS) revenue
premium revenue reports
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