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Generally Accepted Accounting Principles - Research Paper Example
Author : orinnitzsche
Pages 4 (1004 words)
Running Heading: Generally Accepted Accounting Principles Paper Generally Accepted Accounting Principles Paper Customer Name University Name Introduction In today’s world, accounting for health care has become increasingly important. Health care institutions are different from other conventional businesses and therefore their accounting is quite different from the accounting of other businesses…
According to Cleverly, Song, & Cleverly (2010), there are five generally accepted accounting guidelines or principles that are related to accounting for health, namely money measurement, valuation, duality principle, stable monetary unit, and accounting entity. In this paper a discussion will be made on these five generally accepted accounting principles related to health care. Money Measurement Money measurement principle calls for effective recording of all cash flows and revenues that are coming to the organization as well those leaving the organization. Money measurement refers to the measurement of debt obligations and revenue resources accurately so that there is no discrepancy in the accounts of the health care institute. The intent behind this accounting principle is to secure and measure all the incoming and outgoing cash flows of a firm. It is essential to measure the movement of money inside and outside the organization because it is the most basic building block of accounting. This particular accounting principle is related to health care field as the flow of money in a heath care facility is quite fluid and money changes hand quickly in the health care industry. ...