Module 2, Part 1 Quiz Answers

School: Louisiana State University, Shreveport - Course: MHA 706 - Subject: Accounting

Module 2 - Part 1 Quiz Answers 1.Generally Accepted Accounting Principles (GAAP) are said to be comprised by assumptions, principals, and constraints. Match the term to the appropriate category: a.Going Concern ---GAAP Assumption b.Materiality ------ GAAP Constraint c.Expense Matching ------ GAAP Principle 2.Select the term that best matches the definition: a.Operating income - Is a measure of income generated from the "core" business of the organization b.Profitability of the Organizations - Often what individuals assessing income statements are trying to understand c.Net Income - Often referred to as the bottom line d.Non-operating income - Reports income from activities not related to "core" business of the organization 3.Select the term that best matches the definition: a.Net Patient Service Revenue - Payments for services provided (after the provision for bad debts is considered). b.Accrual Accounting - The reason why operating revenues may not represent the actual amount of cash received. c.Expense - Represent the resources used to create revenues d.Salaries and Benefits - Typically, the largest expense of a healthcare organization 4.Please match the term and description that best matches it: a.Accrual Accounting - Recognizes incomes when a cash OBLIGATION is created b.Cash Accounting - Recognizes income when cash is received c.Securities and Exchange Commission - Agency that has the legal authority to regulate the form and content of financial statements of publicly traded companies. d.Generally Accepted Accounting Principles (GAAP) - A set of guidelines needed for the preparation of financial accounting statements. 5.Financial accounting information is conveyed by a business's financial statements. The four most important are: a.Statement of Changes in Equity b.Balance Sheet c.Income Statement d.NOT BOOK VALUE! - Only wrong answer of the 4 6.There are other names for an Income Statement a.Statement of Activities b.Statement of Revenues and Expenses c.Statement of Operations d.NOT STATEMENT OF FINANCIAL POSITION ----ONLY wrong answer of the 4 7.The income statement reports the results of operations a.Over some period of time (typically a year) 8.Depreciation expense is best explained by what...... Expense Matching Principle 9.The amount of taxes saved by depreciation is called the..... Depreciation tax shield 10.In a not-for-profit corporation..... a.The entire amount of net income is reinvested in the business