The Theology Of The United Methodist Church - 1050 Words

When I was 10 years old Rev. Holland Vaughn looked into my eyes and said, â€Å"Michael, you are going to be a pastor one day.† I found his prophetic pronouncement humorous. One, because I had no intention of ever becoming a pastor, and two because even at that age I was already running with neighborhood gangs and engaged in very unchristian activities. As the acolyte, week after week I carried my candle lighter and sat beside him on the altar. I watched the people laugh, cry, fall asleep, and occasionally shout an enthusiastic â€Å"amen!† From the â€Å"preacher’s bench† behind the pulpit. I observed this master plie his trade, using tradition, experience, and reason, to bring the Bible to life. Subconsciously I was reasoning through my own theology,†¦show more content†¦We draw from that depth of tradition reaching back to the church of Pentecost, including early creeds (e.g., Apostles’ and Nicene-Constantinopolitan), various church coun cils, journeys of Christian pilgrims, and writings of Christian thinkers (Heb 12:1-2). This diverse witness has been shaped and preserved over the centuries of Christian teaching and reflection on the Gospel. It contains the great triumphs and epic failures of our tradition, both of which we can learn from. Next, our Christian experience serves as a resource. The Book of Discipline defines Christian experience as â€Å"the personal appropriation of God’s forgiving and empowering grace† yet also highlights the necessary intersection of the Bible and our experience, â€Å"Our experience interacts with Scripture. We read Scripture in light of the conditions and events that help shape who we are, and we interpret our experience in terms of Scripture.† Thus, while I read Scripture through the lens of my own formation, the Bible interprets my

The Justifications of Merciless Killing by the U.S

A country that always makes itself seem as the peacekeeper, builds an enormous weapon to destroy and harm a country, and justifies it by making it seem as if the other country, Japan, was the one who brought it upon themselves. Is it possible that a country, like the United States, could be as ruthless as Hitler himself? The press release given to the public by President Truman attempts to justify the need for the use of a potent weapon, while diverting the attention from the harmful effects: however, other documents such as, Truman’s Diary, a survivor’s story and recent newspapers recognize the harmful effects and the amount of destruction that would be a result of the weapon being used. They ignored the most important aspect of the†¦show more content†¦We are in possession of the most destructive explosive ever devised by man. A single one of our newly developed atomic bombs is actually the equivalent in explosive power to what 2000 of our giant B-29s can car ry on a single mission. This awful fact is one for you to ponder and we solemnly assure you it is grimly accurate.†(Translation of leaflet dropped on the Japanese) This leaflet was dropped on Japan after Hiroshima was attack and was warning other cities of the other bomb. The American government makes themselves seem as if they were put into a war they did not want but that since the Japanese started the war they must finish it. The president during his speech on August 6th, 1945 said, â€Å"It was to spare the Japanese people from utter destruction that the ultimatum of July 26 was issued at the Potsdam. There leaders promptly rejected that ultimatum. If they do not now accept our terms they many accept the rain of ruins from the air the like of which has never been seen on this earth.† (Press Release By The White House.)Saying that they gave the Japanese people the chance to surrender but they did not accept is a way in which they justify killing and destroying a city . Even though Truman compares what the bomb does to Hitler’s destruction, he justifies there reason to use it by saying that they give them a warning, which was something that Hitler wouldShow MoreRelatedThe War Of National Liberation Front Of Algeria1156 Words   |  5 Pagesterrorists), British backers in SOE had been ordered by prime minister Winston Churchill to set Europe ablaze they weren`t terrorist but freedom fighters. Their work of sabotage and ambush was a tactic of a war of national liberation. This was the justification used after the war by many anticolonial movements, like the Viet minh against French rule in Vietnam. They were supplied to fight to fight the Japanese later, after 1945, the Japanese used the same wartime tactics of resistance to attack theRead MoreEssay on Narrative of the Life of Frederick Douglass1097 Words   |  5 Pagesincluding the Holy Bible, can be distorted to advance our position. A current example of this is todays Muslim terrori sts who are using teachings in their Koran to justify their position saying that the Koran dictates that they must fight a holy war, killing as many Christians and Jews as possible, even going so far as to sacrifice their own lives in the process. This sort of religious distortion, used to justify mans self-serving will, is what writer and former slave, Frederick Douglass exposes in hisRead More Truman, the Atomic Bomb, and the Shaping of the Postwar World6419 Words   |  26 Pagesthe United States dropped atomic bombs on Japan in August of 1945, it brought about a dramatic change. Within two weeks of the bombings, Japan had surrendered and World War II had ended. The United States was victorious; and with that victory, the U.S. was in a position to dictate change as never before. The atomic bomb brought about changes in diplomacy between the Soviet Union and the United States. With the Cold War came a greater chance of a nuclear war. 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This incident shows that although Mrs. Lanza had gone through the proper procedure to buy her guns legally, she was still incompetent of proper and responsible gun ownership which led to her son taking advantage of that and killing 26 people. There are only so many cases where mass shootings involved the use of military style assault weapons, but there are even more cases where the shootings are not mass murders. For example, if you look at incidents such as drive by shootingsRead MoreColumbus, The Indians, And Human Progress5743 Words   |  23 Pagesimportant because it proves how cruel the Europeans were and how unnecessary their acts were. Zinn mentions the different ideals between the societies of the Indians and the Europeans to describe the peacefulness of the Indians and the cruelty and justification of the Spaniards motives. He mentions, â€Å"The concept of private ownership of land and homes was foreign to the Iroquois† which meant that there was no hierarchy based on wealth unlike the Spanish and English whom were introduced to that idea longRead MoreGp Essay Mainpoints24643 Words   |  99 Pagessole purpose is to uncover each and every piece of information related to the news article they are writing †¢ Wider and deeper coverage †¢ Connections to a wider spectrum of professionals ( greater insight into issue at hand †¢ E.g. 2008 U.S. Presidential Elections (bloggers provide personal opinions about who was likely to win but New York Times invited experts to do a state-by-state analysis presenting results in a full-page spread, culminating in a detailed map showing states Democrats

Generally Accepted Accounting Principles Free Essays

The revenue recognition principle states that, under the accrual basis of accounting, you should only record revenue when an entity has substantially completed a revenue generation process; thus, you record revenue when it has been earned. The match inning (expense recognition) principle is one of the cornerstones of he accrual basis of accounting. Under this principle, when you record revenue, also record at the same time any expenses directly related to the revenue. We will write a custom essay sample on Generally Accepted Accounting Principles or any similar topic only for you Order Now Thus, if there is a cause-and-effect relationship between revenue and the expenses, record them in the same accounting period. The materiality principle states tattoo are allowed to ignore an accounting standard if the net impact of doing so has such a small impact on the financial statements that a reader of the financial statements would not be misled. Accounting assumptions The going concern principle is the assumption that an entity will remain in cuisines for the foreseeable future. The monetary unit principle states that you only record business transactions that can be expressed in terms of a currency. The time period principle is the concept that a business should report the financial results of its activities over a standard time period, which is usually monthly, quarterly, or annually. The business entity concept states that you must separately record the transactions associated with a business from those of its owners or other businesses. Effective Internal Control Environment 1. Management integrity 2. Competent and ethical personnel: Selection/Good salaries/Training/Rotation 3. Establishment of responsibilities: Organization chart – clear lines of authority, defined areas of responsibilities Delegation of authority for key activities Policies and Procedures 1. Proper authorization 2. Separation of duties Operations from accounting Custody of assets from accounting Authorization of transactions from custody of assets 3. Control of documents and records Adequate records of transactions (egg invoices, purchase orders, cheeses, stockpiles, journals and ledgers) Proper control (pre-numbering invoices and receipts, lock and key, PC swords) 4. Electronic and computer controls Monitoring 1 . Supervision of Employees (all levels) Reduce temptation to steal or defraud company 2 Audits Internal Control of Cash 1. Using a bank account Receiving vs. paying cash [l physical handling of cash vs. accounting Accounting for cash receipts vs. accounting for cash payments 3. Cash receipt controls Physical controls (lock and key) Deposit cash receipts daily Counter-check cash receipts before depositing Match receipts per cash registers with bank deposit slips 4. Cash payment controls Approval for purchases to be separate from queue-signing Proper documents to support payments Authority limits for queue-signing to be strictly adhered to Two signatories for cheeses 5. Bank reconciliation +1- corrections of bank errors +/- corrections of book errors = Adjusted bank balance = Adjusted book balance Bank reconciliation should be done by a person separate from the one handling receipts/ payments If duties cannot be separated, bank reconciliation should be reviewed by a supervisor 6. Petty cash controls Petty cash = small amount of cash kept on office premises to facilitate miscellaneous expo. How to cite Generally Accepted Accounting Principles, Papers Generally Accepted Accounting Principles Free Essays A corporation must use the same depreciation method for tax and financial reporting purposes. Must use different depreciation methods for tax and financial reporting may use different depreciation methods for tax and financial reporting must use different (than for tax purposes), but strictly mandated, depreciation methods for financial reporting purposes. 1 points Question 2 1 . We will write a custom essay sample on Generally Accepted Accounting Principles or any similar topic only for you Order Now Allocation of the historic costs of fixed assets against the annual revenue they generate is called net profits. Gross profits. Depreciation. Amortization. 1 points Question 3 1 . Given the financial manager’s preference for faster receipt of cash flows, a longer depreciable life is preferred to a shorter one. A shorter depreciable life is preferred to a longer one. The manager is not concerned with depreciable lives, because depreciation is a non-cash expense. The manager is not concerned with depreciable lives, because once purchased, depreciation is considered a sunk cost. 1 points Question 4 1 . The Modified Accelerated Cost Recovery System (MACROS) is a depreciation method used for tax financial reporting managerial cost accounting Question 5 . The depreciable life of an asset is of concern to the financial manager. In general, a longer depreciable life is preferred, because it will result in a faster receipt Of cash flows. A shorter depreciable life is preferred, because it will result in a faster receipt of cash flows. A shorter depreciable life is preferred, because management can then purchase new assets, as the old assets are written off. A longer depreciable life is preferred, because management can postpone purchasing new assets, since the Old assets still have a useful life. 1 points Question 6 1 . A corporation sold a fixed asset for $100,000. This is an investment cash flow and a source of funds. An operating cash flow and a source of funds. An operating cash flow and a use of funds. An investment cash flow and a use of funds. Question 7 1 . A corporation raises $500,000 in long-term debt to acquire additional plant capacity. This is considered an investment cash flow. A financing cash flow. A financing cash flow and investment cash flow, respectively. A financing cash flow and operating cash flow, respectively. 1 points Question 8 1 . A firm’s operating cash flow (SCOFF) is defined as Ross profit minus operating expenses. How to cite Generally Accepted Accounting Principles, Papers Generally Accepted Accounting Principles Free Essays Generally Accepted Accounting Principles Kelly Voelm NURS/571 March 25, 2013 Dr. Tricia Jenkins Generally Accepted Accounting Principles Companies and businesses are guided by rules and regulations that they must follow concerning financial data reporting. Generally accepted accounting principles (GAAP) assist accountants to work with the Securities and Exchange Commission (SEC) and are guidelines that apply to most financial statements. We will write a custom essay sample on Generally Accepted Accounting Principles or any similar topic only for you Order Now The GAAP are a list of principles used by accountants and they influence most financial information. These principles of accounting are ? Accounting Entity ? Money Measurement ? Duality ? Cost Valuation ? Stable Monetary Unit Accounting Principles The Accounting Entity is the organization that is the focus of the reports and information. These entities include businesses, churches, school districts, governments, and many other social organizations. For the purpose of this paper health care organizations will be the focus. Hospitals, clinics, physician offices, and other health care entities are required to file monetary reports showing monetary value of the organization. Money Measurement is a concept that relates to transactions that can only be recorded if they can be recorded in monetary terms. There are certain aspects of an organization that cannot be counted on the financial statement. The expertise of staff, reliability of services, and employee working conditions are aspects of the organization that cannot be added to a financial statement. Duality is the assets which are equal to the liabilities and the net assets. The assets, liabilities, and the net asset accounts should always create a balance ending in the duality. This means that the cash used to buy an asset is placed on the liability side of a financial statement and the purchased item is placed on the asset side of that statement. Cost Valuation is also known as historical or acquisition costs are the original monetary value of an item. Assets and liabilities are costs that must be evaluated for financial reporting. Cost valuation does not consider inflation or depreciation values. Stable Monetary Unit allows the assumption that the dollar, a monetary unit, is stable regardless of inflation rates. Regardless of inflation rates financial statements over years usually have the same value. Intentions of Accounting Principles According to Cleverly, Song, and Cleverly, (2011), the accounting entity principle’s intention is to specify the entity for which the accounting focuses defines the information that is pertinent. Cleverly, Song, and Cleverly state that the intention of the money measurement principle is to define adequately the measuring of resources and obligations. Duality principle’s intention is to show that the value of assets will always equal the value of claims. When transactions increase the number of assets and liabilities also increase thus allowing for duality. The intention of the cost valuation principle is to show that asset value may not always equal the amount of money that can be gained by selling of these assets. One downfall is that this can cause old facilities to appear newer and more efficient than they actually are. The intention of the stable monetary unit is to keep changes in the value of a dollar or other form of monetary units from affecting financial worth. This would be like adding apples and oranges if the fluctuation was monitored. Health Care and Relation to Principles The accounting entity in relation to health care could be a clinic operation that is owned by a private physician may be the accounting entity. The organization must be clearly defined to be accurate and not misleading. The physician is not the accounting entity which is where most people make the mistake in placing ownership. Money measurement principle with regard to health care money measurement is guided by the organization and not the individual. The duality principle is evident when the financial statement of a health care facility is looked at such as if the organization purchases $40,000 of patient supplies. The balancing factor will show that there is an asset of this $40,000 of supplies. This has shown a balance of assets and liabilities. The cost valuation principle when it is shown in health care requires that the initial asset valuation will not equal the final valuation because of a dramatic inflation tendency. Current replacement value is not viable for future cash flow changes. The stable monetary unit principle is important in the health care field because even if the income is stable the cash flow can be considered a negative. The stability of money is crucial for there to be a positive outcome. In conclusion, the principles of accounting guide the financial aspects of organizations. These principles are crucial to assist the health care facilities to maintain financial integrity. The actual organization or accounting entity is the focus of the financial statement. The money measurement is in relation to only the transactions or services that are only recorded in a monetary way. Duality describes assets, liabilities, and net assets which are always balanced. Cost valuation refers to the original monetary value of any item. The stable monetary unit must stay stable regardless of inflation rates. The intention of these principles is to guide the financial and monetary aspect of all businesses. Checks and balances are implemented so that the health care organization is successful. Each of these principles allows a financial picture to be available for the constituents of the community involved. References Cleverly, W. O. , Song, P. H. , Cleverly, J. O. (2011). Essentials of health care finance (7th ed. ). Sudbury, MA: Jones and Bartlett Learning. How to cite Generally Accepted Accounting Principles, Papers Generally Accepted Accounting Principles Free Essays Introduction The purpose of this report is to identify the items that may result in adjusting entries for both prepayments and accrual by looking at the trial balance and Income statement. Furthermore, analyzing the historical summary of financial Is to know the trend for profit or loss of the company assets. Fundamental First of all, why we have to make BAD? Balance day adjustments are therefore required to ensure the financial statements portray a correct picture on the firm’s financial performance and financial position. We will write a custom essay sample on Generally Accepted Accounting Principles or any similar topic only for you Order Now We have to recognize all transaction occurring in that accounting period, irrespective of whether cash has been received or paid. The ultimate objective of adjusting entries Is to ensure that the revenues (income) earned In the accounting period are matched by all costs Incurred for that name accounting period (Monish College, 2011). Prepayment There are two types of adjusting entries, prepayments and accruals. Prepayment is a payment in advance of the period to which it pertains. What this mean is, this category of adjustments aligns recorded revenues (income) and costs with appropriate accounting periods. For example, there are situations where cash Is received before goods and services are provided to customers or situations where cash has been paid In advance for costs of operation and which relate to future counting periods. Prepayments divided into two sections, which are prepaid expenses and unearned revenue. Prepaid expenses is type of assets that shown on a balance sheet as a result of business payments for goods and services to be received in the near future. While prepaid expenses are initially recorded as assets, their value Is expensed over time as the benefit Is receive something of value in the near future. Prepayments often occur In regard to Insurance, supplies, advertising, and rent. Earned revenue is also known as prepaid revenue. It means payment, which is received in advance of providing a good or service. Since an obligation exists on the part of the company to provide goods or services for which the advance payment was received, unearned revenue is a liability. An example is a retainer received by an attorney. When the services are performed, revenue is the earned. Another examples are pre-booked airline ticket, rent received In advance and magazine subscription How to cite Generally Accepted Accounting Principles, Papers Generally Accepted Accounting Principles Free Essays Generally Accepted Accounting Principles (United States) In the U. S. , generally accepted accounting principles, commonly abbreviated as US GAAP or simply GAAP, are accounting rules used to prepare, present, and report financial statements for a wide variety of entities, including publicly-traded and privately-held companies, non-profit organizations, and governments. We will write a custom essay sample on Generally Accepted Accounting Principles or any similar topic only for you Order Now Generally GAAP includes local applicable Accounting Framework, related accounting law, rules and Accounting Standard. Similar to many other countries practicing under the common law system, the United States government does not directly set accounting standards, in the belief that the private sector has better knowledge and resources. US GAAP is not written in law, although the U. S. Securities and Exchange Commission (SEC) requires that it be followed in financial reporting by publicly-traded companies. Currently, the Financial Accounting Standards Board (FASB) is the highest authority in establishing generally accepted accounting principles for public and private companies, as well as non-profit entities. For local and state governments, GAAP is determined by the Governmental Accounting Standards Board (GASB), which operates under a set of assumptions, principles, and constraints, different from those of standard private-sector GAAP. Financial reporting in federal government entities is regulated by the Federal Accounting Standards Advisory Board (FASAB). The US GAAP provisions differ somewhat from International Financial Reporting Standards (IFRS), though former SEC Chairman Chris Cox set out a timetable for all U. S. ompanies to drop GAAP by 2016, with the largest companies switching to IFRS as early as 2009 Basic objectives Financial reporting should provide information that is: †¢useful to present to potential investors and creditors and other users in making rational investment, credit, and other financial decisions. †¢helpful to present to potential investors and creditors and other users in assessing the amounts, timing, and uncertainty of prospective cash receipts. à ¢â‚¬ ¢about economic resources, the claims to those resources, and the changes in them. [edit] Basic concepts To achieve basic objectives and implement fundamental qualities GAAP has four basic assumptions, four basic principles, and four basic constraints. [edit] Assumptions †¢Accounting Entity: assumes that the business is separate from its owners or other businesses. Revenue and expense should be kept separate from personal expenses. †¢Going Concern: assumes that the business will be in operation indefinitely. This validates the methods of asset capitalization, depreciation, and amortization. Only when liquidation is certain this assumption is not applicable. †¢Monetary Unit principle: assumes a stable currency is going to be the unit of record. The FASB accepts the nominal value of the US Dollar as the monetary unit of record unadjusted for inflation. †¢The Time-period principle implies that the economic activities of an enterprise can be divided into artificial time periods. [edit] Principles †¢Cost principle requires companies to account and report based on acquisition costs rather than fair market value for most assets and liabilities. This principle provides information that is reliable (removing opportunity to provide subjective and potentially biased market values), but not very relevant. Thus there is a trend to use fair values. Most debts and securities are now reported at market values. †¢Revenue principle requires companies to record when revenue is (1) realized or realizable and (2) earned, not when cash is received. This way of accounting is called accrual basis accounting. †¢Matching principle. Expenses have to be matched with revenues as long as it is reasonable to do so. Expenses are recognized not when the work is performed, or when a product is produced, but when the work or the product actually makes its contribution to revenue. Only if no connection with revenue can be established, cost may be charged as expenses to the current period (e. g. office salaries and other administrative expenses). This principle allows greater evaluation of actual profitability and performance (shows how much was spent to earn revenue). Depreciation and Cost of Goods Sold are good examples of application of this principle. †¢Disclosure principle. Amount and kinds of information disclosed should be decided based on trade-off analysis as a larger amount of information costs more to prepare and use. Information disclosed should be enough to make a judgment while keeping costs reasonable. Information is presented in the main body of financial statements, in the notes or as supplementary information [edit] Constraints †¢Objectivity principle: the company financial statements provided by the accountants should be based on objective evidence. †¢Materiality principle: the significance of an item should be considered when it is reported. An item is considered significant when it would affect the decision of a reasonable individual. Consistency principle: It means that the company uses the same accounting principles and methods from year to year. †¢Prudence principle: when choosing between two solutions, the one that will be least likely to overstate assets and income should be picked (see convention of conservatism). Generally Accepted Accounting Principles (UK) The Generally Accepted Accounting Practice in the UK, or UK GAAP, are the overall body of regulation establis hing how company accounts must be prepared in the United Kingdom. This includes not only accounting standards, but also UK company law. What is referred to elsewhere as Generally Accepted Accounting Principles is in the UK referred to as Generally Accepted Accounting Practice. [edit] History Accounting standards derive from a number of sources. The chief standard-setter is the Accounting Standards Board (ASB), which issues standards called Financial Reporting Standards (FRS). The ASB is part of the Financial Reporting Council, an independent regulator funded by a levy on listed companies[1], and it replaced the Accounting Standards Committee (ASC), which was disbanded in 1990 following a number of criticisms of its work. To the extent that the ASC’s pronouncements, known as Statements of Standard Accounting Practice (SSAPs), have not been replaced by FRS, they remain in force. [edit] Creation/Revision of Standards The ASB has a formal exposure process for proposed standards. Early concepts are issued as Discussion Papers. These are released to the public and comments invited. Where a new standard is to be proposed, a Financial Reporting Exposure Draft (FRED) is released for comment. The standard in final form is only issued when comments have been incorporated or addressed. This aims to address the criticisms levelled at the ASC, whose comment process was less rigorous. Issues that require an immediate solution are considered by the Urgent Issues Task Force (UITF). The UITF comprises a number of senior figures from industry and accounting firms. It meets as necessary to consider pressing issues and issues Abstracts which become binding immediately. [edit] Legislation The principal legislation governing reporting in the UK is laid down in the Companies Act 2006, which incorporates the requirements of European law. The Companies Act sets out certain minimum reporting requirements for companies and, for example, requires limited companies to file their accounts with the Registrar of Companies who makes them available to the general public. From 2005, this framework changed as a result of European law requiring that all listed European companies report under International Financial Reporting Standards (IFRSs). In the UK, companies which are not listed have the option to report either under IFRSs or under UK GAAP[2]. Recently issued UK FRSs have, in any case replicated the wording of corresponding IFRSs, reducing the differences between the two sets of standards significantly. China Accounting Standards From Wikipedia, the free encyclopedia (Redirected from Chinese Accounting Standards) Jump to: navigation, search Chinese accounting standards are the accounting rules used in Chinese state owned corporations in mainland China. They are currently being phased out in favour of Generally Accepted Accounting Principles or International Accounting Standards. As of February 2010, the Chinese Accounting Standard Systems is composed of Basic Standard, 38 specific standards and Application Guidance. Chinese accounting standards are unique because they originated in a socialist period in which the state was the sole owner of industry. Therefore unlike Western accounting standards, they are less a tool of profit and loss and an inventory of assets available to a company. In contrast to a Western balance sheet, Chinese accounting standards do not include an accounting of the debts that a corporation holds, and are less suitable for management control than for accounting for tax purposes. This system of accounting is widely considered to be unsuitable for managing corporations in a market economy. As a result, Chinese corporations are gradually moving toward International Financial Reporting Standards. This has proven to be a massive undertaking. As a consequence Chinese companies who offer shares for sale in the United States used to be required to prepare three sets of statements, one using Chinese accounting standards (China GAAP), one using international standards (IFRS), and one using North American GAAP standards (US GAAP). However, since 2008 the U. S. Securities and Exchange Commission (SEC) allows foreign private issuers to use financial statements prepared in accordance with IFRS. [1] However, in recent years, The Finance Department of Chinese Government has issued new Chinese Accounting Standards which converge into IFRS and the similarity is almost 90-95%. The translation cost has been reduced greatly because of this measure How to cite Generally Accepted Accounting Principles, Papers Generally Accepted Accounting Principles Free Essays Generally Accepted Accounting Principles Stephanie R. Stewart HCS/571 September 24, 2012 Anne Harney Finlon Generally Accepted Accounting Principles Generally Accepted Accounting Principles (GAAP) are important ideas to understand when discussing finances of any kind. It is important for all nurses, especially those in management roles, to understand financial concepts and be involved in the budgetary process. We will write a custom essay sample on Generally Accepted Accounting Principles or any similar topic only for you Order Now This paper will help to create an understanding of GAAP, the purpose of the principles, and how they relate to the health care industry today. Every profession tends to have a language specific to the profession or occupation. The financial world is not immune to this language subset. The term Generally Accepted Accounting Principles (GAAP) provides a dictionary for the language used in the finance world. GAAP also allows for consistency and encourages integrity with financial reporting. According to Finkler, Kovner, and Jones (2007), this set of principles involves eight key rules â€Å"established by the Financial Accounting Standards Board† (p. 104). Additionally, accountants are compelled to denote if the financial records being examined are in accordance with GAAP (Finkler, Kovner, Jones, 2007). Therefore, it is important for health care entities to follow the GAAP concept and ensure adherence to these eight key tenets. While some sources and authors will only list five or six principles, Finkler, Kovner, and Jones discuss eight rules as part of GAAP explanation. These principles â€Å"include the following: * Entity concept * Going-concern concept * Matching principle and cash vs accrual accounting * Cost principle * Objective evidence * Materiality * Consistency [and] * Full disclosure (Finkler, Kovner, Jones, 2007, p. 104). Each of these principles has a general intent and is important for consistency in financial reporting. The entity concept defines what group or person is being discussed within the financial records. An example of such an entity is Shady Acres Nursing Home. The second rule is known as going concern. This specific concept examines the likelihood of whether the entity will still be operating tomorrow, next month, or next year. The reason for examining this information is due to the value of organizational assets (Finkler, Kovner, Jones, 2007). Assets of a company that is not expected to be in business next month will have a different value than the assets of a company expected to be in business for many years to come. For example, the value of the building where Shady Acres Nursing Home operates may be worth far less if it is known the facility will be ceasing operation in a few weeks. The next tenet of GAAP is the matching principle and cash vs. accrual accounting. As discussed by Finkler, Kovner, and Jones (2007), payment for services rendered is not always received in the same year. Additionally, the cost of providing those services may also not be noted as paid in that same year. Inconsistencies can occur as a result of the timing of income and expenses towards the end of a financial year. This GAAP rule helps to create consistency by requiring income and expenses to be reported in the same year. An instance of this rule is when Shady Acres provides skilled nursing care to Mrs. Smith for the month of December 2012. Though it is unlikely that Mrs. Smith’s insurance will pay Shady Acres any sooner than January 2013, the accountants at the nursing home must show that the income was received in 2012. Additionally, the providers of care likely will not be paid for all hours worked until 2013, but that expense also must be shown in 2012. The rules of cost principle and objective evidence are very closely related. The cost principle can be difficult to determine without taking into consideration the objective evidence available to the accountants. Cost principle is essentially the amount paid by an entity to purchase the item. Yet, with many items accountants must take into consideration the depreciation or which will occur over time. This is especially true with buildings and other very expensive items expected to be used for many years. Shady Acres may have paid three million dollars for the land and building five years ago, but because of the real estate crisis the cost principle is now only two million dollars. Due to objective evidence the cost principle will never rise higher than the cost reported on the accounting report even if there is appreciation present. Since cost over time can fluctuate based upon the market and the assessor, it is important to include the rule of objective evidence within this set of accounting principles. To decrease forecasting of cost, accountants list â€Å"the value of most assets at their cost† (Finkler, Kovner, ; Jones, 2007, p. 106). In the previous example, Shady Acres was acquired for three million dollars. If the real estate market rebounds next year and the building appreciates in value, accountants will still use the rule of objective evidence and not set the cost above that which was paid to purchase the building. The sixth component of GAAP is materiality. As pointed out by Finkler, Kovner, and Jones (2007), the expectation for accounting records to be error free is unreasonable. Therefore, accountants take into consideration the degree of the errors made in the financial records. If the degree of error causes decisions to be made differently than if no errors were made, then this is unacceptable and must be corrected. For instance, if Shady Acres was interested in selling the facility to a wealthy investor, accountants would need to determine the value of organization by calculating assets and outstanding expenses. If accountants made an error and valued the organization at a total worth of four million dollars while the organization is only worth three million dollars, then the investor would be making a purchase decision based on faulty information. Accountants would be required to correct this information under GAAP as soon as it is discovered. Consistency is one of simplest rules in GAAP, yet has quite profound effects if not followed. Financial methods of accounting chosen by organizations should be consistent from year to year. If accountants at Shady Acres chose to use a different accounting method for 2012 than had been used for the preceding years then comparisons of Shady Acres’ financial health would be difficult to make. Finally, the rule of full disclosure within GAAP requires that organizations divulge all information related to the financial picture of the organization. It is important to exhibit details of the broader statements generally submitted so that a clear financial status can be ascertained. For example, Shady Acres would be required to submit statements detailing cash flow, appreciation or depreciation of assets, and justifications of all statements presented in addition to the standard â€Å"balance sheet and an operating statement† (Finkler, Kovner, Jones, 2007, p. 106). The concepts of GAAP explained in this paper should be followed by all organizations, including health care organizations. Accountants expect to find adherence to these standards when auditing organizational finance records. Nurses are familiar with standards and policies in health care; GAAP is yet another set of standards to follow. As leaders in health care organizations, nurses should be aware of these concepts and assist the organization’s accountants with the implementation and use of all eight principles. Reference Finkler, S. A. , Kovner, C. T. , ; Jones, C. B. (2007). Financial management for nurse managers and executives (3rd ed. ). St. Louis, MO: Saunders Elsevier. How to cite Generally Accepted Accounting Principles, Papers