Discussion Board – Module 5
My course is Accounting for Healthcare.
- (Depreciation- Chapter 10) In chapter 8 of our text we learned that Depreciation expense is a non- cash item and was added back to the operating activities of the cash flow statement using the in-direct presentation method. Briefly discuss why this activity takes place and its impact on operating activities.
- (Inventory Costing- Chapter 11) The outside reading entitled, “5 Ways to Built a Top-Performance Supply Chain, by Matthew J. Rowan, briefly discuss how the steps outlined in the reading would impact financial statement presentation. (hint: assume that practices were successfully implemented)
** Please, You have to read chapters 8-10-11 well then answer then answer the 2 Questions.
Answer preview
Hospitals need to account for their resources to avoid loss, regardless of their size. Accounting in healthcare is essential for profit making and continuance of hospitals and other health facilities. Depreciation is considered an expense to the business which affects net income. Thus, it is added to the net income to adjust the net income to its original amount before the depreciation occurred. Doing so is necessary because of the net income behind the process of calculating cash flow. Though depreciation is a non-cash transaction, it still affects the cash flow of the business. Operating activities are the source of cash flow in the companies. Depreciation is considered an operating expense although it is an expense that does not affect the outgoing cash (Ward & Calabrese, 2018). Meaning that, the more significant the depreciation…
(400 words)