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Healthcare Finance Chapter 4 Questions And Answers Most Reviewed Rationale., Quizzes of Health sciences

Aston UniversityHealth sciences

Healthcare Finance Chapter 4 Questions And Answers Most Reviewed Rationale. Explain the difference between the equity section of a not-for-profit business and an investor-owned business? - ansIn a not-for-profit business net asset is used instead of equity. Other terms vary from stockholder's equity, owners net worth, net worth, net worth, proprietor's worth, etc. Equity is mostly used in this book though. Give some examples of current liabilities. - ansAccounts payable to pay to a vendor for supplies, wages and benefits, taxes, interest due on debt, utilities How does depreciation expense on the income statement relate to accumulated depreciation on a balance sheet? - ansIn other words, on the balance sheet when you look at the difference in depreciation amounts between two years, that amount becomes the depreciation expense on the income statement. Networking capital = ? - ans= total current assets - total current liabilities

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Healthcare Finance Chapter 4 Questions And Answers Most
Reviewed Rationale.
3 major categories of assets? - ansCurrent assets
Long-term investments
Property & equipment
accounting equation - ansBalance sheet must balance. A=L+E
Balance sheet - ansChanges every day and gives a snapshot of the business's financial position of
an organization at a single point in time.
change in common stock + NI - dividend = change in equity
can also break it down to this:
change in cs + rev - exp. - dividend = change in equity - ans:) :)
DEBT RATIO = ? - ansTotal debt / Total assets
DOL = ? - ansCM/ Profit
explain equity - ansThink of equity as worth of the company.
If your total assets equal $100 and you owe $95, then your equity/worth/what you have left over
is only $5.
Explain the difference between the equity section of a not-for-profit business and an investor-
owned business? - ansIn a not-for-profit business net asset is used instead of equity. Other terms
vary from stockholder's equity, owners net worth, net worth, net worth, proprietor's worth, etc.
Equity is mostly used in this book though.
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Download Healthcare Finance Chapter 4 Questions And Answers Most Reviewed Rationale. and more Quizzes Health sciences in PDF only on Docsity!

Reviewed Rationale.

3 major categories of assets? - ansCurrent assets Long-term investments Property & equipment accounting equation - ansBalance sheet must balance. A=L+E Balance sheet - ansChanges every day and gives a snapshot of the business's financial position of an organization at a single point in time. change in common stock + NI - dividend = change in equity can also break it down to this: change in cs + rev - exp. - dividend = change in equity - ans:) :) DEBT RATIO =? - ansTotal debt / Total assets DOL =? - ansCM/ Profit explain equity - ansThink of equity as worth of the company. If your total assets equal $100 and you owe $95, then your equity/worth/what you have left over is only $5. Explain the difference between the equity section of a not-for-profit business and an investor- owned business? - ansIn a not-for-profit business net asset is used instead of equity. Other terms vary from stockholder's equity, owners net worth, net worth, net worth, proprietor's worth, etc. Equity is mostly used in this book though.

Reviewed Rationale.

Give some examples of current liabilities. - ansAccounts payable to pay to a vendor for supplies, wages and benefits, taxes, interest due on debt, utilities How does depreciation expense on the income statement relate to accumulated depreciation on a balance sheet? - ansIn other words, on the balance sheet when you look at the difference in depreciation amounts between two years, that amount becomes the depreciation expense on the income statement. Networking capital =? - ans= total current assets - total current liabilities On the balance sheet, what is the difference between long-term investments and property and equipment? - ansLong-term investments have been invested and will mature in over a year. An example is a bond or stock. Property and equipment are more real assets (MRI machine/building) Retained earnings =? - ansRE = NI - dividends THE STATEMENT OF CASH FLOWS - ansCash flow from operating activities Cash tied to operations. Operating income. Cash flow from investing activities Property and equipment and securities investments Cash flow from financing activities what are assets? - ansAn item that possesses or creates economic benefit for the organization What are the relationship between net income on the income statement and the equity section on a balance sheet? - ansBecause equity = total assets - total liabilities Net income = Total Revenue - Total expenses

Reviewed Rationale.

What is the difference between gross fixed assets and net fixed assets? - ansGross fixed assets is like the value new and net fixed assets is like the value of it new minus depreciation What is the difference between liabilities and equity? - ansLiabilities are claims against the assets of the organization. Ex: unpaid salaries, supplies purchased. Equity is the amount of total assets financed by nonliability capital, or total assets - total liability What is the difference between long-term debt and notes payable? - ansLong-term debt is debt that will not be paid off in one accounting period. Notes payable is also called short term debt... This is paid off in one accounting period. This is the main difference between the two. What is the difference between the income statement and balance sheet in regards to timing? - ansIncome statement= reports results over a period of time Balance sheet= financial position of an entity at that given time because it's always changing. What is the implication of the accounting identity for the numbers on a balance sheet? - ansThat they must balance!! A=L+E ....A is for assets, L is for liabilities, and E is for Equity. What is the statement of cash flows and how does it differ from the income statement? - ansThe statement of cash flow focuses on the cash that comes and goes into/from a business. It details where a business gets its cash and what happens to it. The income statement isn't that detailed on cash flows and what's going on with the cash. What is wrong with this statement: "The clinic's cash balance for 2011 was $150,000, while its net income on December 31, 2011, was $50,000." - ansSince the balance sheet is a look at cash right then and there it can't say the "cash balance for 2011 was...." Because it's only a shot of the cash at that point in time it can't be over a year's time.

Reviewed Rationale.

What makes a liability a current liability? - ansIt's a liability that must be paid within one accounting period what makes an asset current asset? and examples? - ansCash and other assets that are expected to be turned into cash within one accounting period Cash, short-term investments, net patient accounts receivable