Instructor’s Manual for Financial Management for Public, Health, and Not-for-
B! B! B! B! B! B! B! B! B!
Profit Organizations1,
B!
SOLUTIONS MANUAL for Financial Management for Public He
B! B! B! B! B! B! B!
alth, and Not-for-
B! B!
Profit Organizations 7th Edition by Steven Finkler, Thad Calab
B! B! B! B! B! B! B! B!
rese, (Complete 15 Chapters)
B! B! B!
,Chapter 3: Additional Budgeting Conce
B! B! B! B! 3-2
pts
INTRODUCTION
Chapter 1 B!
TO
FINANCIALM B
!
ANAGEMENT
Questions for Discussion B! B!
1-
1. Financial management is the subset of management that focuses on generating financial info
B! B! B! B! B! B! B! B! B! B! B! B! B!
rmationthat can improve decisions. The decisions are oriented toward achieving the various go
B
! B! B! B! B! B! B! B! B! B! B! B! B!
als of the organization while maintaining a satisfactory financial situation. Financial management
B! B! B! B! B! B! B! B! B! B! B! B!
encompassesthe broad areas of accounting and finance. B
! B! B! B! B! B! B!
1-2. In proprietary, or for-
B! B! B! B!
profit, organizations, an underlying goal is to maximize the wealth of the owners of the organiz
B! B! B! B! B! B! B! B! B! B! B! B! B! B! B!
ation.
1-
3. In public service organizations, decisions are oriented toward achieving the various goals of t
B! B! B! B! B! B! B! B! B! B! B! B! B! B!
he organization while maintaining a satisfactory financial situation.
B! B! B! B! B! B! B!
1-
4. Accounting is a system for keeping track of the financial status of an organization and the fin
B! B! B! B! B! B! B! B! B! B! B! B! B! B! B! B! B!
ancial results of its activities. It has often been referred to as the language of business. The voc
B! B! B! B! B! B! B! B! B! B! B! B! B! B! B! B! B!
abulary used by accounting is the language of nonbusiness organizations as well.
B! B! B! B! B! B! B! B! B! B! B!
1-
5. Accounting is subdivided into two major areas: managerial accounting and financial accounti
B! B! B! B! B! B! B! B! B! B! B! B!
ng. Managerial accounting relates to generating any financial information that managers can us
B! B! B! B! B! B! B! B! B! B! B! B!
e to improve the future results of the organization. This includes techniques designed to genera
B! B! B! B! B! B! B! B! B! B! B! B! B! B!
te any financial data that might help managers make more effective decisions. Major aspects of
B! B! B! B! B! B! B! B! B! B! B! B! B! B! B!
managerialaccounting relate to making financial plans for the organization, implementing those p
B
! B! B! B! B! B! B! B! B! B! B! B!
lans, and thenworking to ensure that the plans are achieved. Some examples of managerial acc
B! B! B
! B! B! B! B! B! B! B! B! B! B! B! B!
ounting include preparing annual operating budgets, generating information for use in making
B! B! B! B! B! B! B! B! B! B! B! B!
major investment decisions, and providing the data needed to decide whether to buy or lease a
B! B! B! B! B! B! B! B! B! B! B! B! B! B! B!
major piece of equipment. Financial accounting provides retrospective information. As events t
B! B! B! B! B! B! B! B! B! B! B! B!
hat have financial implications occur they are recorded by the financial accounting system. From
B! B! B! B! B! B! B! B! B! B! B! B! B! B!
time to time (usuallymonthly, quarterly, or annually), the recorded data are summarized and re
B! B! B! B
! B! B! B! B! B! B! B! B! B! B!
ported to interested users.The users include both internal managers and people outside the org
B! B! B! B
! B! B! B! B! B! B! B! B! B! B!
anization. Those outsiders include those who have lent or might lend money to the organizatio
B! B! B! B! B! B! B! B! B! B! B! B! B! B!
n (creditors), those who might sell things to the organization (called suppliers or vendors), and
B! B! B! B! B! B! B! B! B! B! B! B! B! B! B!
other interested parties. These interested parties may include those with a particular interest in
B! B! B! B! B! B! B! B! B! B! B! B! B! B!
public service organizations, such asregulators, legislators, and citizens. Financial reports provide
B! B! B! B! B
! B! B! B! B! B! B!
, Instructor’s Manual for Financial Management for Public, Health, and Not-for-
B! B! B! B! B! B! B! B! B!
information
B! on the financial
Profit Organizations
B! 1,B! status of the organization at a specific point in time, as well as rep
B! B! B! B! B! B! B! B! B! B! B! B! B! B! B! B!
orting the past results of the organization‘s operations (i.e., how well it has done from a financi
B! B! B! B! B! B! B! B! B! B! B! B! B! B! B! B!
al viewpoint).
B!
, Chapter 3: Additional Budgeting Conce
B! B! B! B! 3-4
pts
1-
6. Finance focuses on the alternative sources and uses of the organization‘s financial resources.
B! B! B! B! B! B! B! B! B! B! B! B! B! B
Obtaining funds when needed from appropriate sources and the deployment of resources withi
! B! B! B! B! B! B! B! B! B! B! B! B!
n theorganization fall under this heading. In addition, finance involves the financial markets (su
B! B
! B! B! B! B! B! B! B! B! B! B! B! B!
ch as stock and bond markets) that provide a means to generating funds for organizations.
B! B! B! B! B! B! B! B! B! B! B! B! B! B!
1-
7. Yes. Achieving the goals of the organization requires financial planning. Financial managemen
B! B! B! B! B! B! B! B! B! B! B! B!
t provides information for managers to use in making their decisions. It helps managers by pro
B! B! B! B! B! B! B! B! B! B! B! B! B! B! B!
viding information on the likely financial impact of each proposed alternative. It also provides in
B! B! B! B! B! B! B! B! B! B! B! B! B! B!
formation about financial stability, efficiency, and effectiveness.
B! B! B! B! B! B!
1-
8. Clearly, we might expect some public service organizations that are proprietary, such as som
B! B! B! B! B! B! B! B! B! B! B! B! B! B!
e hospitals, to earn profits. But what about other public service organizations such as charities?
B! B! B! B! B! B! B! B! B! B! B! B! B! B! B
Theyshould make a profit as well. Profits provide a safety margin against unexpected costs, pro
! B
! B! B! B! B! B! B! B! B! B! B! B! B! B! B!
vide resources to replace buildings and equipment, and to expand and improve services.
B! B! B! B! B! B! B! B! B! B! B! B!
1-9. Federal government (see text Figure 1-1)
B ! B! B! B! B! B!
Individual income taxes B! B!
Social insurance taxes B! B!
Corporate income tax B! B!
State and local government (see text Figure 1-4)
B! B! B! B! B! B! B!
Sales and gross receipts tax B! B! B! B!
Federal government B!
Property taxes B!
Individual income taxes B! B!
Health sector (see text Figure 1-6)
B! B! B! B! B!
Private insurance B!
Medicare
Medicaid
Other government programs B! B!
Not-for-profit sector (see text) B! B! B!
Private payments for goods and services B! B! B! B! B!
Government payments for goods and services B! B! B! B! B!
Donations
1-
10. Federal government spending exceeded $6 trillion in 2020 and state and local government sp
B! B! B! B! B! B! B! B! B! B! B! B! B! B!
endingwas more than $3 trillion in 2018. In contrast, the GDP was $21 trillion in 2020. For mor
B
! B! B! B! B! B! B! B! B! B! B! B! B! B! B! B! B! B!
e up to date information, examine the statistical tables of the most recent Economic Report of
B! B! B! B! B! B! B! B! B! B! B! B! B! B! B! B!
the President, which is available online.
B! B! B! B! B!
B! B! B! B! B! B! B! B! B!
Profit Organizations1,
B!
SOLUTIONS MANUAL for Financial Management for Public He
B! B! B! B! B! B! B!
alth, and Not-for-
B! B!
Profit Organizations 7th Edition by Steven Finkler, Thad Calab
B! B! B! B! B! B! B! B!
rese, (Complete 15 Chapters)
B! B! B!
,Chapter 3: Additional Budgeting Conce
B! B! B! B! 3-2
pts
INTRODUCTION
Chapter 1 B!
TO
FINANCIALM B
!
ANAGEMENT
Questions for Discussion B! B!
1-
1. Financial management is the subset of management that focuses on generating financial info
B! B! B! B! B! B! B! B! B! B! B! B! B!
rmationthat can improve decisions. The decisions are oriented toward achieving the various go
B
! B! B! B! B! B! B! B! B! B! B! B! B!
als of the organization while maintaining a satisfactory financial situation. Financial management
B! B! B! B! B! B! B! B! B! B! B! B!
encompassesthe broad areas of accounting and finance. B
! B! B! B! B! B! B!
1-2. In proprietary, or for-
B! B! B! B!
profit, organizations, an underlying goal is to maximize the wealth of the owners of the organiz
B! B! B! B! B! B! B! B! B! B! B! B! B! B! B!
ation.
1-
3. In public service organizations, decisions are oriented toward achieving the various goals of t
B! B! B! B! B! B! B! B! B! B! B! B! B! B!
he organization while maintaining a satisfactory financial situation.
B! B! B! B! B! B! B!
1-
4. Accounting is a system for keeping track of the financial status of an organization and the fin
B! B! B! B! B! B! B! B! B! B! B! B! B! B! B! B! B!
ancial results of its activities. It has often been referred to as the language of business. The voc
B! B! B! B! B! B! B! B! B! B! B! B! B! B! B! B! B!
abulary used by accounting is the language of nonbusiness organizations as well.
B! B! B! B! B! B! B! B! B! B! B!
1-
5. Accounting is subdivided into two major areas: managerial accounting and financial accounti
B! B! B! B! B! B! B! B! B! B! B! B!
ng. Managerial accounting relates to generating any financial information that managers can us
B! B! B! B! B! B! B! B! B! B! B! B!
e to improve the future results of the organization. This includes techniques designed to genera
B! B! B! B! B! B! B! B! B! B! B! B! B! B!
te any financial data that might help managers make more effective decisions. Major aspects of
B! B! B! B! B! B! B! B! B! B! B! B! B! B! B!
managerialaccounting relate to making financial plans for the organization, implementing those p
B
! B! B! B! B! B! B! B! B! B! B! B!
lans, and thenworking to ensure that the plans are achieved. Some examples of managerial acc
B! B! B
! B! B! B! B! B! B! B! B! B! B! B! B!
ounting include preparing annual operating budgets, generating information for use in making
B! B! B! B! B! B! B! B! B! B! B! B!
major investment decisions, and providing the data needed to decide whether to buy or lease a
B! B! B! B! B! B! B! B! B! B! B! B! B! B! B!
major piece of equipment. Financial accounting provides retrospective information. As events t
B! B! B! B! B! B! B! B! B! B! B! B!
hat have financial implications occur they are recorded by the financial accounting system. From
B! B! B! B! B! B! B! B! B! B! B! B! B! B!
time to time (usuallymonthly, quarterly, or annually), the recorded data are summarized and re
B! B! B! B
! B! B! B! B! B! B! B! B! B! B!
ported to interested users.The users include both internal managers and people outside the org
B! B! B! B
! B! B! B! B! B! B! B! B! B! B!
anization. Those outsiders include those who have lent or might lend money to the organizatio
B! B! B! B! B! B! B! B! B! B! B! B! B! B!
n (creditors), those who might sell things to the organization (called suppliers or vendors), and
B! B! B! B! B! B! B! B! B! B! B! B! B! B! B!
other interested parties. These interested parties may include those with a particular interest in
B! B! B! B! B! B! B! B! B! B! B! B! B! B!
public service organizations, such asregulators, legislators, and citizens. Financial reports provide
B! B! B! B! B
! B! B! B! B! B! B!
, Instructor’s Manual for Financial Management for Public, Health, and Not-for-
B! B! B! B! B! B! B! B! B!
information
B! on the financial
Profit Organizations
B! 1,B! status of the organization at a specific point in time, as well as rep
B! B! B! B! B! B! B! B! B! B! B! B! B! B! B! B!
orting the past results of the organization‘s operations (i.e., how well it has done from a financi
B! B! B! B! B! B! B! B! B! B! B! B! B! B! B! B!
al viewpoint).
B!
, Chapter 3: Additional Budgeting Conce
B! B! B! B! 3-4
pts
1-
6. Finance focuses on the alternative sources and uses of the organization‘s financial resources.
B! B! B! B! B! B! B! B! B! B! B! B! B! B
Obtaining funds when needed from appropriate sources and the deployment of resources withi
! B! B! B! B! B! B! B! B! B! B! B! B!
n theorganization fall under this heading. In addition, finance involves the financial markets (su
B! B
! B! B! B! B! B! B! B! B! B! B! B! B!
ch as stock and bond markets) that provide a means to generating funds for organizations.
B! B! B! B! B! B! B! B! B! B! B! B! B! B!
1-
7. Yes. Achieving the goals of the organization requires financial planning. Financial managemen
B! B! B! B! B! B! B! B! B! B! B! B!
t provides information for managers to use in making their decisions. It helps managers by pro
B! B! B! B! B! B! B! B! B! B! B! B! B! B! B!
viding information on the likely financial impact of each proposed alternative. It also provides in
B! B! B! B! B! B! B! B! B! B! B! B! B! B!
formation about financial stability, efficiency, and effectiveness.
B! B! B! B! B! B!
1-
8. Clearly, we might expect some public service organizations that are proprietary, such as som
B! B! B! B! B! B! B! B! B! B! B! B! B! B!
e hospitals, to earn profits. But what about other public service organizations such as charities?
B! B! B! B! B! B! B! B! B! B! B! B! B! B! B
Theyshould make a profit as well. Profits provide a safety margin against unexpected costs, pro
! B
! B! B! B! B! B! B! B! B! B! B! B! B! B! B!
vide resources to replace buildings and equipment, and to expand and improve services.
B! B! B! B! B! B! B! B! B! B! B! B!
1-9. Federal government (see text Figure 1-1)
B ! B! B! B! B! B!
Individual income taxes B! B!
Social insurance taxes B! B!
Corporate income tax B! B!
State and local government (see text Figure 1-4)
B! B! B! B! B! B! B!
Sales and gross receipts tax B! B! B! B!
Federal government B!
Property taxes B!
Individual income taxes B! B!
Health sector (see text Figure 1-6)
B! B! B! B! B!
Private insurance B!
Medicare
Medicaid
Other government programs B! B!
Not-for-profit sector (see text) B! B! B!
Private payments for goods and services B! B! B! B! B!
Government payments for goods and services B! B! B! B! B!
Donations
1-
10. Federal government spending exceeded $6 trillion in 2020 and state and local government sp
B! B! B! B! B! B! B! B! B! B! B! B! B! B!
endingwas more than $3 trillion in 2018. In contrast, the GDP was $21 trillion in 2020. For mor
B
! B! B! B! B! B! B! B! B! B! B! B! B! B! B! B! B! B!
e up to date information, examine the statistical tables of the most recent Economic Report of
B! B! B! B! B! B! B! B! B! B! B! B! B! B! B! B!
the President, which is available online.
B! B! B! B! B!
