MHA 706 Midterm- Lord Exam Questions and Answers

MHA 706 Midterm- Lord Exam Questions and Answers Income statement components - Answer-Revenues, expenses, non-operating income, taxes (if for profit), & net income. Revenues - Answer-represent both cash received and payer obligations. Test Question- - Answer-Provision for bad debt would be item on income statement. Expenses - Answer-resource expenditures required to produce the revenues. (Both cash and noncash expenses are recognized.) Non-operating Income - Answer-reports income from activities not related to the provision of patient services. Example: **philanthropic gift, 1 time gift** Taxes - Answer-For profit=taxes, not-for-profit= no taxes. Net Income - Answer-the difference between total revenue and total expenses when total revenue is greater. Net income measures overall (total) economic profitability as defined by GAAP The time frame of an income statement - Answer-For a specific period, usually annually. Income statement for not-for-profit entities - Answer-You can tell by looking to see if the statement has taxes or not, if not, it is not-for-profit. Accounting Equation - Answer-Assets = Liabilities + Equity Balance Sheet Components - Answer-assets, liabilities, equity Assets - Answer-money and other valuables belonging to an individual or business Liabilities - Answer-debts that you owe Equities - Answer-Financial rights to the assets of a business The time frame of a balance sheet - Answer-At a current point of time, differs from income statement because in an income statement it is yearly (annually), or at a specific time.