Accounting Fundamentals for Health Care Management

1.) What is the purpose of an audit preformed by a CPA?

2.) Do audits signify to fin financial statement users that no fraud and embezzlement occurred at the organanization?

3.) How does sampling financial transactions help an auditor identify accounting errors?

4.) How do the auditors management letter and opinion letter differ from each other?

5.) What is the opinion letter?

6) What are the different opinions that can be rendered on an opinion letter?

7.) Describe governmnet efforts to reduce audits failures.

8.) Which GAAP requires the use of depreciation for assets that have useful lives beyond 1 year?

9.) Explain why the (the answer from ques 8) GAAP__________ requires the use of depreciation fo assets that have useful lives beyond 1 Year.

10.) Explain the four steps in the depreciation process.

11.)The York City Hospital has just acquired new equipment. The equipment cost $4,250,000, and the organization spent $135,000 on upgrading the physical plant the new equipment will be located in. The equipment is expected to have 10- year useful life and a savlvage value of 10% (i.e, $425,000). Calculate the first 5 years of depreciation, using the following methods:

a.) Stright Line Method

b.) Double Declining Balance Method

c.) Sum-of the-Years Digits method

12.) A new medical practice purchases computer equipment that cost $15,000, to be used for medical billing. In addition, the practice purchases billing software that cost $5,000. Both the computer equipment and the software are expected to have 3-Year useful lives and no salvage vaule. Calculate the 3 years of depreciation, using the following methods:

a.) Stright Line Method

b.) Double Declining Balance Method

c.) Sum-of the-Years Digits method

13.) The New Hospital has raised money for a new oncology wing. The hospital has also aquired medical diagnostic equipment that cost $500,000. In addition, the hospital paid $15,000 to ship the equipment from the manufacturer and $40,000 to install the equipment. The equipment is expected to have a 6-year useful life and a $30,000 salvage value. Calculate the 6 years of depreciation using the following methods:

a.) Stright Line Method

b.) Double Declining Balance Method

c.) Sum-of the-Years Digits method

14.) For-profit organizations can use different methods for reporting depreciation to owners and to the government (for tax purposes). What is the practical effect of theis allowance?