divided between on–balance sheet activities and off–balance sheet activities. The off–balance sheet activities consist primarily of fee-based activities for services rendered that do not create an asset or a liability. These create no problem for the cash flow presentation because they appear on the income statement and flow directly through the operating section of the cash flow statement. The major problems are created by activities that have significant impact on the balance sheet. They are: 1)
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Principles). As an accounting firm, it is vital to examine your financial statements on a constant basis. You will need to look for the accounting handling of share-based payment and accounting consolidation theory, as it pertains to special purpose entities and consolidations (Schroeder, Clark, & Cathey, 2011). Share-Based Payments are another way for a publicly held company to offer compensation to his or her employees or other parties, without using the company’s assets. These compensation awards
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Customer Payments Received Does the employee responsible for opening customer payments/remittances also perform any of the following duties: • Record payments • Record or authorize write-offs or adjustments to customer accounts in the accounts receivable ledger • Reconcile the bank account(s) The employee who is responsible for the receipt of cash should not have access to record or authorize transactions in the accounts receivable ledger and customer accounts. In addition, the person
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Revenue Cycle is defined as “All administrative and clinical functions that contribute to the capture, management, and collection of patient revenue”, it is the term that includes the entire visit of a patient from account creation to payment. Lexington Medical Center sends out a monthly Healthcare Business Insights card made by HBI’s consulting and analytics team. The card has several graphs to assist with revenue cycle reporting, training and team member development, operational assessments,
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follows: transactions, speculative, and precautionary. Shifting the emphasis away from individuals, we can use these three categories to describe the motives for corporations to hold cash. Motives for holding cash: l Transactions motive: to meet payments, such as purchases, wages, taxes, and dividends, arising in the ordinary course of business. l Speculative motive: to take advantage of temporary opportunities, such as a sudden decline in the price of a raw material. l Precautionary motive:
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Liability recognition in the balance sheet depends upon it is probable that economic benefits will flow from the entity; and the value of the liability can be reliably measured. If the entity can determine whether any a future sacrifice of economic resources should take place or not, then there appears to be no present obligation and a liability does not exist. An update for liabilities| PRBA003 | Slide 3 1 Contingent liabilities cannot be recognised by an entity on the balance sheet but will be disclosed
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Group I. We shall discuss the Accounting Standards (specified in the syllabus) in this chapter taking individual standard in detail. 2. Overview 2.1 AS 4: Contingencies and Events Occurring After the Balance Sheet Date Accounting Standard 4 ‘Contingencies∗ and Events Occurring after the Balance Sheet Date’ covers accounting treatment of ∗ Pursuant to AS 29, “Provisions, Contingent Liabilities and Contingent Assets’ becoming mandatory in respect of accounting periods commencing on or after 1.4
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QUESTION 1 ( MARKS ) Compensation balances are frequently a part of revolving lending arrangements with banks, yet they add to the cost of financing for the borrower. Why, then, borrowers agree to such terms? What other types of alternative financing are available? The borrowers agree to such terms because they use the compensating balance to pay for non credit bank sources such as cash management services must major firms have now negotiated for banks to use the corporations collected funds
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The Framework of FRS F.R.A SS7 Two systems worldwide R22: Financial Statement Analysis: An Introduction R23: Financial Reporting Mechanics R24: Financial Reporting Standards The Financial Accounting Standards Board (FASB) The Statement of Financial Accounting Standards (SFAS) R25: Understanding the I/S R26:Understanding the B/S R27: Understanding the C/F R28: Financial Analysis Techniques R29: Inventories R30: Long-Lived Assets R31: Income Taxes R32: Long-Term Liabilities
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and compound interest? c. Name three liabilities that we would probably accrue at the end of the accounting period? d. What is “current portion of long term debt”? e. When should a contingent liability be reported (recorded) on the balance sheet? What two requirements must be met? f. How do we determine what an amount deposited today will be worth in five years? What things do we need to know to calculate the amount in five years? g. Is “f” above a present value problem
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