Chapter 3 Quiz

The amount of taxes saved by depreciation is called the ....

Depreciation tax shield

Depreciation expense is best explained by what ....

Expense Matching Principle

Profitability of the Organizations

Often what individuals assessing income statements are trying to understand

What are the other names for an Income Statement?

Statement of Activities, Statement of Revenues and Expenses, Statement of Operations

Please select all of the correct answers. Financial accounting information is conveyed by a business's financial statements. The four most important are: Statement of Cash Flows Balance Sheet Income Statement Book Value Statement of Changes in Equity

Statement of Cash Flows, Balance Sheet, Income Statement, Statement of Changes in Equity

In a not-for-profit corporation.....

The entire amount of net income is reinvested in the business or flows to the balance sheet

Salaries and Benefits

Typically, this is the largest expense category for health services organizations.

Generally Accepted Accounting Principles (GAAP) -

a set of accounting standards that is used in the preparation of financial accounting statements

Cash Accounting

accounting that recognizes business transactions only when cash is received or disbursed

Securities and Exchange Commission (SEC) -

agency that has the legal authority to regulate the form and content of financial statements of publicly traded companies

Operating Income

profitability from normal operations that equals gross profit less operating expenses

Accrual Accounting

recognizes incomes when a cash obligation is created. (Accounting that records the impact of a business event as it occurs, regardless of whether the transaction affected cash)

Non-operating income

reports income from activities not related to the provision of patient services.

Net Income

the difference between total revenue and total expenses when total revenue is greater (often referred to as the "bottom line")

Net Patient Service Revenue (NPSR)

what is paid to us after revenue deductions (contractual adjustments and charity care adjustments