reply to my classmate

My course is Accounting for Healthcare.

My classmate discussion is.

1. (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.

There are two cash flow methods: the direct cash flow and the indirect cash flow method. In the direct cash flow method, each transaction has to be analyzed to see whether it involved an actual transfer of cash. This method is simple and straightforward. It is just subtracting and adding the cash value, but it is also complicated and time-consuming because the more transactions the company handles, the more complicated and time-consuming the process of cash handling becomes. Most companies prefer to use the indirect cash flow method because they start with their company’s net income for the period – the profit from the month, quarter, year or whatever time frame has been examined. You then add or subtract balance sheet items that affected profit without affecting actual cash flow, or that affected cash flow without affecting profit. Depreciation is a typical example. For example, a company reported a $5,000 depreciation expense during the period. Depreciation reduces the company’s profit, but it is a non-cash expense. The company did not pay out $5,000 in cash during the period. Instead, they reported $5,000 worth of depreciation on an asset they already purchased. Therefore, when building a cash-flow statement, they would add back $5,000 to their reported net income for the period.

1. (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)

The article, by Rowan, is articulating the importance of planning and strategies for managing all resources. It is explaining that cash flow monitoring and inventory assessments are part of the strategy and a fundamental tool for organizations. Companies must clearly understand cash flow transactions: how to pay and how often to pay suppliers, logistics companies, etc. For instance, in a medical setting, such as a hospital, it is vital that physicians have all the supplies they need to care for the patients at their fingertips especially in a life or death situation when the time is too precious to waste. The primary objective to any strategy a hospital chooses should be to have materials available at all times in order to ensure the smooth flow of care for patients while keeping costs under control. For this reason, regular inventories on the medical supplies are necessary before another order is requested. This is also represented in term of cash monitoring because cash is king and wasting supplies is wasting money.

Reference

Do you need a similar assignment done for you from scratch? We have qualified writers to help you. We assure you an A+ quality paper that is free from plagiarism. Order now for an Amazing Discount!
Use Discount Code “Newclient” for a 15% Discount!

NB: We do not resell papers. Upon ordering, we do an original paper exclusively for you.

“Are you looking for this answer? We can Help click Order Now”

The post reply to my classmate first appeared on Nursing Essays Writers.