April 3, 2012
Cheryls J. Gonzalez
Accounting is a set of concept and techniques that are used to measure and report financial information about economic unit. The information is reported to variety of differences types of interest parties. These include managers, owners, creditor, governmental unit financial analytics, and even employees. (Walther, Dec 21, 2010).In the health care system this information can be using by the government agencies and insurance companies.
Principle One: Accounting Entity
Is the organization for which financial information are recorded and reported. Prepared the financial statements like balanced sheet, statement of operation and are focuses in all the information that is pertinent to the institution. Business entity concept states that the owner is two separated/distinct persons. This information need to be clear and the concept defined to the data be use and not useless. The accounting entity tries to control the economic resources using accounting records and periodic financial statement preparation. The entity can be one person (MD) or a group of people like a hospital, may be under a corporation. Look to evaluate the expenses, benefits of the employee, the income of the hospital or institution. Whit all this information had a clear understating in the way running the institutions.
Principle Two: Money Measurement
The money measurement concept stipulated that all business transactions must be expressed in money terms, if something cannot be measured in money, will not be included in accounting book. All the transactions can be recorded in a book account to have physical view of the information. Example is the transaction made to buy equipment for the new floor department and can be describe for monetary unit like how many bed, desk, supply and chair,. Other information can be recorded is the charity services given, describe in how...