...Generally Accepted Accounting Principles Deborah Gandy HCS571 June 3, 2013 Tamica Lewis Generally Accepted Accounting Principles To meet health care changes resulting from decreased reimbursement an aging population, and technology the nursing professions responsibilities morphed from the bedside to the board room. In the last two decades a substantial increase in nurses in senior level positions in hospitals or other facilities reflects the need for nurses to obtain advanced degrees to meet the demands of heath care as a business. In a report published 2010, by the Robert Wood Johnson Foundation, and the Institute of Medicine (IOM) the summary report clearly identifies the need for nurses to participate fully as partners to improve the nation’s health care system(“The future of nursing: leading change, advancing,” 2010). To that end, in order for nurses to participate actively in shaping the health care system nurses need education in what many consider as non-traditional nursing subjects, such as finance. In response to the need for education in finance nursing curricula include at least one course as an under graduate, and one on the post- graduate level. Together these courses provide both academic and practical knowledge the nurse manager can translate readily to manage an organization or an individual nursing unit (Finkler, Kovner...
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...Accounting Principles Related to Nursing Olasumbo Dada University of Phoenix Abstract The continuing rise in technological advancement in the health care industry has led to a rising cost in the industry. Hospitals and other healthcare sectors face a major challenge in managing the massive change in respect to cost and still being able to provide excellent care for their patients considering the expansion that the industry is continuously facing. As a result, the financial accounting aspect of the healthcare industry needs more attention than ever. The advancement in the financial aspect of healthcare requires more people to assume administrative duties. Cleverly, Song, & Cleverly (2011). For healthcare organizations to function properly in the increasing change in cost, revenue, and reimbursement by third parties, certain principles are necessary to be in place. According to Voelm, K. (2013), some generally accepted financial principles in healthcare are: Accounting Entity, money measurement, duality, cost valuation, stable monetary unit. Accounting principles related to Nursing Accounting Entity: Accounting entity is the part of a business that specializes in economic activities. Once an entity is established, accountants are able to determine the cash flows and transactions that will impact the entity's financial statements. Accountants in organizations focus on accounting entities and report transactions that are related to that entity. Accounting entities control...
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...Accepted Accounting Principles SA HCS/571 January 11th, 2014 R.G. Generally Accepted Accounting Principles Every organization consists of an accounting department that manages the finances. The key element to maintaining any hospital, ambulatory care center, or private medical office is to have a structured financial statement and a team of accountants to audit the establishment. The generally accepted accounting principles that are reviewed include entity concept, going-concern concept, matching principle and cash vs. accrual accounting, the cost principle, objective evidence, materiality, consistency, and full disclosure. The “certified professional accountants are required to indicate whether an audited set of financial statements is in compliance with generally accepted accounting principles” ( (Finkler, Kovner, & Jones, p.104, 2007). The entity concept focuses on the object of study whether it may be a hospital, urgent care center, nursing school, or a private medical office. The intention of the concept is for identification purposes. It is related to health care, for example, a hospital may be affiliated with a long term care facility, a nursing school, and medical office. The hospital is considered as one entire entity. A long term care facility, nursing school, and medical office are considered subentities. The financial statements are prepared separately for each of the identified subentities. The second factor of the generally accepted accounting principle...
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...brief description of each principle and the intention behind the principle. o Relate each principle to health care. Entity concept - The entity is the person or organization that is the focus of attention. A large medical center that includes a hospital, nursing school, medical school, and long-term care facility is an entity. Accounting records may be kept for that entity as a whole. However, the hospital, nursing school, medical school, and long-term care facility that make up the medical center are each entities as well. Financial records could be maintained separately for each of these subentities. When financial statements are prepared, it is important to identify the specific identity of the entity to which the statements relate. All accounting transactions must take the perspective of the entity for which the financial statements report. For example, suppose that we are interested in learning about the finances of the nursing school. Suppose further that the nursing school purchased some supplies from the hospital but has not paid for them. On the financial records of the nursing school entity, there would be an account payable to indicate the obligation to pay for the supplies. On the records of the hospital entity there would be an account receivable because it has not yet been paid for the supplies it provided. Going-concern concept - The second critical GAAP is that of the going concern. There is a presumption when accounting records are prepared that...
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...Generally Accepted Accounting Principles Healthcare is continually evolving and has become a business and an economic force in current society. Historically, stakeholders such as physicians and other health care professionals are adept at making clinical and health-related decisions. However, they often lack the ability to make informed financial decisions. Many have come to realize financial criteria and cost-effective health care delivery is paramount to the success of modern healthcare systems. Therefore, stakeholders recognize the need and relevance of financial knowledge to make informed decisions (Cleverly, Jones & Cleverly, 2011). Concept and purpose of Generally Accepted Accounting Principles Organizations, including health care facilities, employ accountants to oversee the financial endeavors of the organization. Generally accepted accounting principles are rules created by the Financial Accounting Standards Board to regulate financial accounting and prepare the organization’s financial statements (Finkler, Kovner & Jones, 2007). Generally accepted accounting principles or GAAP is widely used in the health care industry(Pounder, 2011). The principles provide industries with a framework for tracking and monitoring the organization’s financial circumstances. GAAP helps in preparing the four most important financial statements relevant to the facility’s economic well-being. The financial statements are balance sheets, statements of operation, cash flow, and change in...
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...article “Hospital Nursing Costs, Billing, and Reimbursement” including the relationship of the budget to the four major financial statements and GAAP principles. Compile an Operational Budget from the article “Hospital Nursing Costs, Billing, and Reimbursement” An operational budget for a hospital nursing department forecasts this unit’s contribution to the income statement (Gapenski, 2012, p. 234). The operational budget has volume assumptions, revenue assumptions, cost assumptions, and a pro forma profit and loss statement. For nursing departments, volume assumptions drive variable cost assumptions such as labor. The revenue assumptions and the pro forma profit and loss statement typically are not applied as nurses are billed as a fixed cost as part of the hospital’s room rate. Typically, the volume assumptions are based on patient location and tied to the Diagnosis Related Group (DRG) weighting, which distributes nursing care expenses across three categories of care such as routine, intermediate, or intensive (Welton, Fischer, DeGrace, Zone-Smith, 2006). The study documented in “Hospital Nursing Costs, Billing, And Reimbursement” found patient location a less accurate indicator of nursing costs when compared to nursing intensity, indicating the patient location methodology does not link nursing care costs with hospital revenue as accurately as the nursing intensity methodology would. Modifying the billing methodology of nursing care by using the nursing intensity model...
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...Syllabus-MBA (Hospital Administration) PAPER – I: BASIC CONCEPT OF HEALTH -Code MHA 101 Concept of Health and Disease • Concept of health & disease and well being. • Natural history of disease and role of hospitals to offer various levels of care • Prevention aspect of diseases • Dynamics of disease transmission • Changing pattern of diseases • Concept of health indicators Preliminary Human anatomy and Physiology • Basic concepts of human anatomy • Basic concepts of human physiology Suggested Reading: Human Anatomy- Prof. Samar Mitra Human Anatomy- Prof. A. K. Dutta Text Book of Human Physiology- Dr. C. C. Chatterjee Common Pathological Conditions • Basic concepts of pathogenesis of common diseases • Basic concepts of interpretation of investigations reports Suggested Reading: Robbin’s Textbook of Pathology – Robbin, Cotran, Kumar Textbook of Microbiology – Ananantanarayan & Paniker Basic concepts of Pharmacology: Commonly used Medicine in a hospital, Narcotic drugs, use and abuse of drugs. Dispensing of medicine, Drugs store, drug stock / purchase of medicine, oxygen, I/V Fluid, Chemicals etc. Suggested Reading: Textbook of Pharmacology: Dr. K. D. Tripathi PAPER – 2: Hospital Based Healthcare & Its changing scenario-Code MHA 102 Overview of Hospital • Concept of Modern Hospital & Privatization in Health Sector • Public Sector Hospitals and Level of care / offered facilities ...
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...Generally Accepted Accounting Principles in Healthcare Generally Accepted Accounting Principles (GAAP) are the accounting standards used in the United States that provide an outlet for organization to record and report their financial information in a standardized manner (Richards, n.d.). This has proven to be of particular importance in the healthcare arena where many areas of finances can be ambiguous or gray. Additionally, the principles guide the reporting systems to prove or disprove the financial viability of the organization. This again is important in the healthcare industry related to achieving the goal of providing quality care to patients (Cleverly, Song, & Cleverly, 2011). GAAP focuses on five different principles of accounting. Accounting entity, money measurement, duality, cost valuation, and stable monetary unit are the five principles discussed in the following paragraphs. Principle definition and the relationship they have to the healthcare industry will be identified and correlated to healthcare practices. Accounting Entity Cleverly, Song, & Cleverly (2011), define an accounting entity as the organization for which financial statements are being formed. They discuss the difference between entities such as sole proprietorship, incorporations, and affiliations with government agencies and universities. The clear definition does not include employees or other persons or organizations with vested interest in the organization but solely the organization’s financial...
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...needs of Patton Fuller Community Hospital. The Patton Fuller Community Hospital Nursing Statistics provided information including cost of nurse per hour, cost of nurse per 24 hour day, number of nurses per patient, number of nurses per day, nursing cost per day, and nursing cost per month. This statistical budget is the basis of our budget creating process. We are able to identify patient volume and resource assumptions used in other budgets (Gapenski, 2008). The decision was to provide a $1 raise to our nursing staff. The effect of this raise is demonstrated in the simulated budget for January through December. We added the total costs from the $1 increase over the course of the year to the 2010 operating budget. With adding in the additional salary costs of $631 (in thousands) to the prior year salary and benefit costs, total expenses will increase 1.3% for a total of $468,756. As a result of the salary increase the operating and net income will be $8,485. Because of the increase in pay to the nurses Patton Fuller Community Hospital income will decrease slightly. By using the statistic budget in developing a new operating budget, we are able to effectively identify trends and other issues where we would need to better the organization. Creating a better organization would result in using its resources effectively and efficiently and eliminated unnecessary costs. Accounting is a very important part of every business and...
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...Generally Accepted Accounting Principles in Healthcare Generally Accepted Accounting Principles or GAAP was developed from different accounting entities, one of which was the Financial Accounting Standards Board or FASB. GAAP is a group of standards for accounting with common industry language developed over many years and used by businesses to organize financial information. The main purpose for GAAP is to make a standard way for anyone to pick up a financial statement and be able to compare financials using the same set of rules. GAAP is an accounting method used in health care facilities. These are specific policies that are used when the health care institution must make important financial decisions. To understand financial statements, the importance and relevance of GAAP must be understood. These standards guide accountants in the measuring and reporting of financial events of healthcare entities such as hospitals, clinics, not-for-profit groups, and other healthcare related businesses. The information used in these financial statements must be relevant, reliable, and comparable. Some of the concepts or principles used in the preparation of financial statements by way of GAAP are discussed below. Accrual Principle The accrual principle simply means that accounting transactions should be recorded in the period that they occur rather than when the cash flows related to them occur. In the healthcare field, all revenue earned for in-house patients should be recorded...
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...2012 Catalog Volume 20 Issue 1 March 5, 2012 – December 31, 2012 This Catalog contains information, policies, procedures, regulations and requirements that were correct at the time of publication and are subject to the terms and conditions of the Enrollment Agreement entered into between the Student and ECPI University. In keeping with the educational mission of the University, the information, policies, procedures, regulations and requirements contained herein are continually being reviewed, changed and updated. Consequently, this document cannot be considered binding. Students are responsible for keeping informed of official policies and meeting all relevant requirements. When required changes to the Catalog occur, they will be communicated through catalog inserts and other means until a revised edition of the Catalog is published. The policies in this Catalog have been approved under the authority of the ECPI University Board of Trustees and, therefore, constitute official University policy. Students should become familiar with the policies in this Catalog. These policies outline both student rights and student responsibilities. The University reserves the right and authority at any time to alter any or all of the statements contained herein, to modify the requirements for admission and graduation, to change or discontinue programs of study, to amend any regulation or policy affecting the student body, to increase tuition and fees, to deny admission, to revoke an offer...
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...Generally Accepted Accounting Principles in Healthcare April Dierickx HSC/571 June 10, 2013 Tamica Lewis Generally Accepted Accounting Principles in Healthcare Generally Accepted Accounting Principles (GAAP) are the accounting standards used in the United States that provide an outlet for organization to record and report their financial information in a standardized manner (Richards, n.d.). This has proven to be of particular importance in the healthcare arena where many areas of finances can be ambiguous or gray. Additionally, the principles guide the reporting systems to prove or disprove the financial viability of the organization. This again is important in the healthcare industry related to achieving the goal of providing quality care to patients (Cleverly, Song, & Cleverly, 2011). GAAP focuses on five different principles of accounting. Accounting entity, money measurement, duality, cost valuation, and stable monetary unit are the five principles discussed in the following paragraphs. Principle definition and the relationship they have to the healthcare industry will be identified and correlated to healthcare practices. Accounting Entity Cleverly, Song, & Cleverly (2011), define an accounting entity as the organization for which financial statements are being formed. They discuss the difference between entities such as sole proprietorship, incorporations, and affiliations with government agencies and universities. The clear definition does not include...
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...Assignment # 1 Teresa A Arledge Dr. Laura Forbes HSA525 January 28, 2012 According to Gapenski, financial accounting involves identifying, recording, and communicating the operational results and status of an organization. Financial accounting information is conveyed by a business’s financial statements. The three most important are: income statement, balance sheet, and statement of cash flows. The need for financial statements is to provide accounting information to outside investors so they will have reliable information regarding the financial status of the organization. However, the information presented in financial statements is as important to managers as it is to investors. Perhaps the most important question about a business’s financial status is whether or not it is making money. According to Gapenski, the income statement provides information about a business’s operations and economic profitability. The income statement has often been called by other names such as statement of operations and statement of activities. The income statement reports the results of operations over some period of time, say a year. It has three key elements: Revenues represent both cash received and payer obligation. Expenses are resources required to produce the goods or services. Net income is the profit, and it equals revenues minus expenses. In this assignment I will illustrate an income statement for Brand wine Homecare which is a not -for profit business. In 2007 Brandywine Healthcare...
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...Reporting Practices and Ethics Nicole Anderson HCS/405 March 16, 2015 Joe Gazdik Reporting Practices and Ethics According to The Chron, Generally Accepted Accounting Principles (GAAP) are accounting standards used in the United States that allow the recording and reporting of financial information in a uniform manner (2015). As a benefit Companies can ease the burden of comparing financial statements by using GAAP. GAAP also aids in health care to establish creditworthiness of the business or organization and earn a rating of financial strength. GAAP allows business to use actual accounting. By using GAAP companies can report outstanding revenue. A company has the ability to show an acquisition or money that is guaranteed but not yet received, such as a government grant, which provides a higher net worth than if the cash accounting method were used. Monies defaulted by clients or patients is may not be included. This process is called a contra asset and is reported as a realizable value. According to the National Law Review, with the increased focus by the Obama Administration on financial crimes, health care fraud, and corporate fraud, corporate compliance and ethics programs have never been more important (2010). This article discusses the importance of effective corporate compliance programs and ethics programs. These Guidelines will help permit reductions of a subsequent sentence, culpability score, for organizations that have shown to have effective compliance...
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...Transforming Lives Communities The Nation …One Student at a Time Disclaimer Academic programmes, requirements, courses, tuition, and fee schedules listed in this catalogue are subject to change at any time at the discretion of the Management and Board of Trustees of the College of Science, Technology and Applied Arts of Trinidad and Tobago (COSTAATT). The COSTAATT Catalogue is the authoritative source for information on the College’s policies, programmes and services. Programme information in this catalogue is effective from September 2010. Students who commenced studies at the College prior to this date, are to be guided by programme requirements as stipulated by the relevant department. Updates on the schedule of classes and changes in academic policies, degree requirements, fees, new course offerings, and other information will be issued by the Office of the Registrar. Students are advised to consult with their departmental academic advisors at least once per semester, regarding their course of study. The policies, rules and regulations of the College are informed by the laws of the Republic of Trinidad and Tobago. iii Table of Contents PG 9 PG 9 PG 10 PG 11 PG 11 PG 12 PG 12 PG 13 PG 14 PG 14 PG 14 PG 14 PG 15 PG 17 PG 18 PG 20 PG 20 PG 20 PG 21 PG 22 PG 22 PG 22 PG 23 PG 23 PG 23 PG 23 PG 24 PG 24 PG 24 PG 24 PG 25 PG 25 PG 25 PG 26 PG 26 PG 26 PG 26 PG 26 PG 26 PG 27 PG 27 PG 27 PG 27 PG 27 PG 27 PG 28 PG 28 PG 28 PG 28 PG 28 PG 33 PG 37 Vision Mission President’s...
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