ACHE Week 3 and 4 Finance
1. What is Financial Accounting?
Financial accounting involves the identification, measurement, recording, and communication of an
organization’s economic events and financial status in monetary terms. ️
2. What is Managerial Accounting?
Managerial accoun...
Financial accounting involves the identification, measurement, recording, and communication of an
organization’s economic events and financial status in monetary terms. ✔️
2. What is Managerial Accounting?
Managerial accounting focuses on providing financial information internally to assist management in
decision-making, planning, and controlling operations.
3. What is the Difference Between Financial and Managerial Accounting?
Financial accounting is geared towards external reporting and compliance with regulations, while
managerial accounting is aimed at internal decision-making and often involves detailed analyses that are
not provided in financial accounting reports. ✔️
4. What is GAAP?
GAAP stands for Generally Accepted Accounting Principles, which are the authoritative standards for
financial reporting.
5. Types of Auditor's Opinions:
- Unqualified Opinion: Indicates that the financial statements present a true and fair view.
- Qualified Opinion: Points out any exceptions or issues found in the financial statements.
- Adverse Opinion: Indicates that the financial statements do not present a true and fair view. ✔️
6. Accounting Concepts:
Fundamental principles that guide the preparation of financial statements, ensuring consistency,
comparability, and reliability.
7. Accounting Methods:
- Cash Accounting: Records revenues and expenses when cash changes hands.
, - Accrual Accounting: Records revenues and expenses when they are earned or incurred, regardless of
the timing of cash flows. ✔️
8. Advantages of Cash Accounting:
- Simplicity in tracking cash flow.
- Provides a clear picture of available cash.
9. Advantages of Accrual Accounting:
- Offers a more accurate representation of financial performance.
- Matches income and expenses in the period they occur, ensuring better decision-making.
10. Four Financial Statements:
- Balance Sheet
- Income Statement (Statement of Operations)
- Statement of Cash Flows
- Statement of Changes in Equity ✔️
11. Statements of Operation (Income Statement):
This statement outlines the financial performance of an organization over a specific period, detailing
revenues and expenses.
12. What is the Purpose of the Statement of Operations?
To present the results of operating activities over a defined period, highlighting income and expenses.
✔️
13. Difference Between Gross and Net Patient Service Revenue:
Gross patient service revenue is the total charges for services before any deductions, while net patient
service revenue reflects the actual revenue received after accounting for discounts, charity care, and
bad debts. ✔️
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