MHA 706 Midterm | FINANCIAL MANAGEMENT
MIDTERM | ALL QUESTIONS AND CORRECT
ANSWERS | ALREADY GRADED A+ | PROFESSOR
VERIFIED 2026-2027
Regulations and standards of -Securities and Exchange Commission (SEC): has the
financial accounting (e.g. SEC, legal authority to regulate the form and content of
GAAP, FASB) financial statements.
-Financial Accounting Standards Board (FASB)
-Generally Accepted Accounting Principles (GAAP):
the conventions that have evolved from the
pronouncements and rulings of the implementing
organizations constitute a set of guidelines for the
preparation of financial accounting statements. -
ONLY applies only to financial accounting
statements. Does NOT remain STATIC.
GAAP (Generally Accepted Split into 3 categories: Assumptions, Principles, &
Accounting Principles) Constraints
Assumptions of GAAP economic entity, monetary unit, periodicity, going
concern
Principles of GAAP historical cost, revenue recognition, expense
recognition (matching), full disclosure
Constraints of GAAP Materiality & Cost-benefit
Accrual Accounting Accounting that records the impact of a business event
as it occurs, regardless of whether the transaction
affected cash.
*More complicated, provides a better picture of true
economic status of a business, is required by GAAP.
Record revenue at the point of time
Cash Accounting accounting that recognizes business transactions only
when cash is received or disbursed.
*Simple and easy and mimics tax statements. Record
when I get paid for a service.
, Expenses resource expenditures required to produce the
revenues. (Both cash and noncash expenses are
recognized.)
Non-operating Income reports income from activities not related to the
provision of patient services.
Example: *philanthropic gift, 1 time gift*
Taxes For profit=taxes, not-for-profit= no taxes.
Net Income 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 For a specific period, usually annually.
statement
Income statement for not-for-profit You can tell by looking to see if the statement has taxes
entities or not, if not, it is not-for- profit.
Accounting Equation Assets = Liabilities + Equity
Balance Sheet Components assets, liabilities, equity
Assets money and other valuables belonging to an individual
or business
Liabilities debts that you owe
Equities Financial rights to the assets of a business
The time frame of a balance sheet At a current point of time, differs from income
statement because in an income statement it is yearly
(annually), or at a specific time.
Short-term investments (marketable Investments in highly liquid, typically, low-risk, securities
securities) having a maturity of less than one year.
Example: T-Bills (treasury bills)
Long-term investments Investments in securities (financial assets) as opposed
to buildings and equipment (real assets). Have
maturities greater than one year.
Gross Assets The total value of the assets someone owns.
When purchased, fixed assets are posted on the
MIDTERM | ALL QUESTIONS AND CORRECT
ANSWERS | ALREADY GRADED A+ | PROFESSOR
VERIFIED 2026-2027
Regulations and standards of -Securities and Exchange Commission (SEC): has the
financial accounting (e.g. SEC, legal authority to regulate the form and content of
GAAP, FASB) financial statements.
-Financial Accounting Standards Board (FASB)
-Generally Accepted Accounting Principles (GAAP):
the conventions that have evolved from the
pronouncements and rulings of the implementing
organizations constitute a set of guidelines for the
preparation of financial accounting statements. -
ONLY applies only to financial accounting
statements. Does NOT remain STATIC.
GAAP (Generally Accepted Split into 3 categories: Assumptions, Principles, &
Accounting Principles) Constraints
Assumptions of GAAP economic entity, monetary unit, periodicity, going
concern
Principles of GAAP historical cost, revenue recognition, expense
recognition (matching), full disclosure
Constraints of GAAP Materiality & Cost-benefit
Accrual Accounting Accounting that records the impact of a business event
as it occurs, regardless of whether the transaction
affected cash.
*More complicated, provides a better picture of true
economic status of a business, is required by GAAP.
Record revenue at the point of time
Cash Accounting accounting that recognizes business transactions only
when cash is received or disbursed.
*Simple and easy and mimics tax statements. Record
when I get paid for a service.
, Expenses resource expenditures required to produce the
revenues. (Both cash and noncash expenses are
recognized.)
Non-operating Income reports income from activities not related to the
provision of patient services.
Example: *philanthropic gift, 1 time gift*
Taxes For profit=taxes, not-for-profit= no taxes.
Net Income 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 For a specific period, usually annually.
statement
Income statement for not-for-profit You can tell by looking to see if the statement has taxes
entities or not, if not, it is not-for- profit.
Accounting Equation Assets = Liabilities + Equity
Balance Sheet Components assets, liabilities, equity
Assets money and other valuables belonging to an individual
or business
Liabilities debts that you owe
Equities Financial rights to the assets of a business
The time frame of a balance sheet At a current point of time, differs from income
statement because in an income statement it is yearly
(annually), or at a specific time.
Short-term investments (marketable Investments in highly liquid, typically, low-risk, securities
securities) having a maturity of less than one year.
Example: T-Bills (treasury bills)
Long-term investments Investments in securities (financial assets) as opposed
to buildings and equipment (real assets). Have
maturities greater than one year.
Gross Assets The total value of the assets someone owns.
When purchased, fixed assets are posted on the
