Government Test Study Guide

3. What calculation would you use to determine the net income Revenues minus expenses equal net income. (Yes.  Net Income = revenues – expenses) 4. Your healthcare Regulations and Rules in the Accounting Practice:  There are basic accounting     rules that all organizations must follow.  The purpose of these rules is to make sure that sound accounting principles are being followed.  There are private entity rules and governmental entity rules.  Which of the following acronym would best describe these regulations and rules

Outside Auditor’s technique for Accuracy In the Furthermore, when the internal control is fixed, the outside auditor can rely on the clients system and less audit testing can be conducted. When everything is improved, the management letter is given to the organization’s top management and not disclosed to the public, (Finkler, S. A., Ward, D. M., & Calabrese, T. D., 2013). Next, is the auditor’s report that entails the opinion letter usually written in three paragraphs and given to the board of trustees. Then, the opinion paragraph is added on to state the organizations financial statements are in accordance of the financial position and followed through with (GAAP). The clean opinion addresses the opinion of the auditor and the overall exercising of professionalism. Also, the complete opinion of the financial statements is to give a representation of the organization. All other opinions may be included and can be addressed by adverse opinions if (GAAP) was not in accordance. A qualified opinion can be added if a specific area wasn’t included in the financial statement when needed. Finally, the management reports are conducted by the management team and not the auditors. The management report is the annual report the topics included in the report are the internal control system and the responsibility of the audit committee.

Changes in FASB Accounting Standards In 1973 the Financial Accounting Standards Board (FASB) was established to set the financial accounting standards in the United States of America for nongovernmental entities. These standards are collectively called U.S. Generally accepted Accounting Principles, or U.S. GAAP. The Securities and Exchange Commission (SEC) and the American Institute of Certified Public Accountants acknowledge the authority of these standards (FASB, n.d). A “proven, independent due process” is used to collect the viewpoints of the financial statements prepares and users for the constant improvement of these standards. An Accounting Status Update(ASU) is not an authoritative source however documents the amendments to communicate the changes in the FASB Codification for a user to understand the reason and future of those changes (FASB, n.d).

Item 6.|  |SELECTED CONSOLIDATED FINANCIAL DATA|  | |23|  | Item 7.|  |MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS|  | |25|  |

f) To evaluate the material misstatement in the accounts, I think both of the consolidated income statement and the three financial statements are useful. We need to use the information properly from all the financial statements. However the consolidated income statement is the most useful one. If there is a significant change in an account balance comparing with preceding two years, the auditor will examine whether there a material misstatement exists. For instance, the bad debt expense as a percent of net sales in 2011, 2010 and 2009 are 0.56%, 0.70% and 0.69%, respectively. There should

Recognition and Measurement Criteria: the auditor shall obtain sufficient appropriate audit evidence about whether management's decision to recognize, or to not recognize, the accounting estimates in the financial statements; and the selected measurement basis for the accounting estimates, are in accordance with the requirements of the applicable financial reporting framework.

4. (TCO 6) Under what situation might a budget be most effective? 5. (TCO 6) How does long-range planning compare to a master budget? 6. (TCO 6) Which one of the following is a source of information used to prepare the budgeted income statement?

Slide 3: Financial statements for public companies are compiled according to Generally Accepted Accounting Principles, or GAAP. This is mandated by the Securities and Exchange Commission as a means of ensuring that companies produce these statements consistently. That allows investors to easily compare different companies when they are

GAAP for Health Care The mutual set of accounting criteria used to develop medical centers financial statements are known as generally accepted accounting principles (GAAP). GAAP are a mixture of respected criteria created by Securities and Exchange Commission (SEC) and accountants. The SEC has authority granted by The Securities Act of 1933 and the Securities Exchange Act of 1934, to determine reporting and disclosure requirements. Oversight is the general functions of the SEC, granting the Governmental Accounting Standards Board (GASB) to determine the standards. Generally accepted accounting practices are required for accountant to follow and medical centers to use so medical centers and provide investors with a minimal

Broader accountability should be fulfilled by the government as compared to profitable entities. Government accounting standards are made to provide budgetary information to the users. For example, property tax is a need of government only. It is required by the government to provide information about property tax in its financial statements. Pension requirement for government and other business entities is same in the reporting standards.

In the U.S., Generally Accepted Accounting Principles are accounting rules used to prepare, present, and report financial statements for a wide variety of entities, including publicly traded and privately held companies, non-profit organizations, and governments. The term is usually confined to the United States; hence it is commonly abbreviated as

Accounting Analysis, including:  an analysis of the company’s accounting policies that are likely to affect interpretation of its financial reports (at least 3 policies)

Statements are prepared in accordance with Generally Accepted Accounting Principles (GAAP), which refers to a set of rules, standards, and practices. They are used throughout the accounting industry to prepare and standardize financial statements that are issued and help investors and creditors compare companies within the same industry. Companies are expected to follow generally accepted accounting principles when they report their financial information. GAAP affects the measurement of economic activities and the disclosure of information about activities. It also affects the preparation and summarization of economic information, and the record keeping of measurements at average intervals.

INTRODUCTION: Financial Statements provides information that is used by interested parties (users) to assess and appraise the performance and financial Status of managers and the institutions respectively and also to make economic decisions. External auditors are engaged to ensure the reliability and trustworthiness of such Financial Statement so presented. STATEMENT OF PROBLEM:

accounting standards accounting standards Introduction to Accounting Standards Accounting is the art of recording transactions in the best manner possible. Accounting Standards are the policy documents issued by recognized expert accountancy bodies relating to various aspects of measurement, treatment