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Business Finance Healthcare Finance: An Introduction to Accounting and Financial Management

a. To define: The difference between equity section for investor owned business and for not-for-profit business. Introduction: Financial statement of the company may include income statement and the position statement where position statement is also referred as balance sheet . This statement reveals the information about company’s assets and liabilities for a particular period of time. The equity section for not-for profit business is different from that of investor owned business as in not-for-profit business equity section is referred as net worth assets and the whole amount of profit is retained whereas in an investor owned business, equity section is comprised of paid-in capital, retained earnings and other incomes and the amount of profit is distributed among the shareholders in the form of dividend. b. To define: the relationship between the income on the income statement and the equity on the balance sheet. Introduction: Financial statement of the company may include income statement and the position statement where position statement is also referred as balance sheet. This statement reveals the information about company’s assets and liabilities for a particular period of time. On income statement, net income is computed by subtracting expenses from revenues whereas in the amount of income recorded in the equity section is the amount of net income after deducting preference dividends. The amount of net income transferred to equity section on the balance sheet is regarded as retained earnings over a period of time.

a. To define: The difference between equity section for investor owned business and for not-for-profit business. Introduction: Financial statement of the company may include income statement and the position statement where position statement is also referred as balance sheet . This statement reveals the information about company’s assets and liabilities for a particular period of time. The equity section for not-for profit business is different from that of investor owned business as in not-for-profit business equity section is referred as net worth assets and the whole amount of profit is retained whereas in an investor owned business, equity section is comprised of paid-in capital, retained earnings and other incomes and the amount of profit is distributed among the shareholders in the form of dividend. b. To define: the relationship between the income on the income statement and the equity on the balance sheet. Introduction: Financial statement of the company may include income statement and the position statement where position statement is also referred as balance sheet. This statement reveals the information about company’s assets and liabilities for a particular period of time. On income statement, net income is computed by subtracting expenses from revenues whereas in the amount of income recorded in the equity section is the amount of net income after deducting preference dividends. The amount of net income transferred to equity section on the balance sheet is regarded as retained earnings over a period of time.

Solution Summary: The author explains the difference between equity section for investor owned business and not-for-profit business.

Healthcare Finance: An Introduction to Accounting and Financial Management

Healthcare Finance: An Introduction to Accounting and Financial Management

6th Edition

ISBN: 9781567937411

Author: Louis C. Gapenski, Kristin L. Reiter

Publisher: Health Administration Press

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Financial Transaction Analysis

The transaction analysis is done with the help of the accounting equation. The basic accounting equation is alternatively known as the balance sheet equation is based on the double-entry system which says that for each transaction happening in a business…

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Healthcare Finance: An Introduction to Accounting and Financial Management

Ch. 4 - Prob. 1.1STQ Ch. 4 - Prob. 1.2STQ Ch. 4 - Prob. 1.3STQ Ch. 4 - Prob. 1.4STQ Ch. 4 - Prob. 2.1STQ Ch. 4 - Prob. 2.2STQ Ch. 4 - Prob. 2.3STQ Ch. 4 - Prob. 2.4STQ Ch. 4 - Prob. 2.5STQ Ch. 4 - Prob. 3.1STQ

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