Solution Manual for Financial Management for Public, Health, and Not-for-Profit Organizations, 7th Edition – Complete Instructor’s Guide

SOLUTION MANUAL FORg g




Financial Management for Public, Health, and Not-for-Profit Organizations Seventh
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g Edition by Steven A. Finkler
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FULL TEST BANK!!!
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,Chapterg3:gAdditionalgBudgetinggConcepts 3-2

INTRODUCTION
Chapter 1 g TO
FINANCIA
g


L
MANAGEMENT
QuestionsgforgDiscussion

1-
1.g Financialgmanagementgisgthegsubsetgofgmanagementgthatgfocusesgonggeneratinggfinancialginformat
iongthatgcangimprovegdecisions.gThegdecisionsgaregorientedgtowardgachievinggthegvariousggoalsgofgth
egorganizationgwhilegmaintaininggagsatisfactorygfinancialgsituation.gFinancialgmanagementgencompass
esgthegbroadgareasgofgaccountinggandgfinance.

1-2.gIngproprietary,gorgfor-
profit,gorganizations,gangunderlyingggoalgisgtogmaximizegthegwealthgofgthegownersgofgthegorganizatio
n.

1-
3.gIngpublicgservicegorganizations,gdecisionsgaregorientedgtowardgachievinggthegvariousggoalsgofgtheg
organizationgwhilegmaintaininggagsatisfactorygfinancialgsituation.

1-
4.g Accountinggisgagsystemgforgkeepinggtrackgofgthegfinancialgstatusgofgangorganizationgandgthegfinan
cialgresultsgofgitsgactivities.gItghasgoftengbeengreferredgtogasgtheglanguagegofgbusiness.gThegvocabular
ygusedgbygaccountinggisgtheglanguagegofgnonbusinessgorganizationsgasgwell.

1-
5.gAccountinggisgsubdividedgintogtwogmajorgareas:gmanagerialgaccountinggandgfinancialgaccounting
.gManagerialgaccountinggrelatesgtoggeneratingganygfinancialginformationgthatgmanagersgcangusegtogi
mprovegthegfuturegresultsgofgthegorganization.gThisgincludesgtechniquesgdesignedgtoggenerateganygfin
ancialgdatagthatgmightghelpgmanagersgmakegmoregeffectivegdecisions.gMajorgaspectsgofgmanagerialgac
countinggrelategtogmakinggfinancialgplansgforgthegorganization,gimplementinggthosegplans,gandgthengw
orkinggtogensuregthatgthegplansgaregachieved.gSomegexamplesgofgmanagerialgaccountinggincludegprep
aringgannualgoperatinggbudgets,ggeneratingginformationgforgusegingmakinggmajorginvestmentgdecisio
ns,gandgprovidinggthegdatagneededgtogdecidegwhethergtogbuygorgleasegagmajorgpiecegofgequipment.g Fi
nancialgaccountinggprovidesgretrospectiveginformation.gAsgeventsgthatghavegfinancialgimplicationsgo
ccurgtheygaregrecordedgbygthegfinancialgaccountinggsystem.g Fromgtimegtogtimeg(usuallygmonthly,gquar
terly,gorgannually),gthegrecordedgdatagaregsummarizedgandgreportedgtoginterestedgusers.gThegusersginc
ludegbothginternalgmanagersgandgpeoplegoutsidegthegorganization.gThosegoutsidersgincludegthosegwh
oghaveglentgorgmightglendgmoneygtogthegorganizationg(creditors),gthosegwhogmightgsellgthingsgtogtheg
organizationg(calledgsuppliersgorgvendors),gandgotherginterestedgparties.gTheseginterestedgpartiesgmay
gincludegthosegwithgagparticularginterestgingpublicgservicegorganizations,gsuchgasgregulators,glegislators

,gandgcitizens.gFinancialgreportsgprovideginformationgongthegfinancialgstatusgofgthegorganizationgatgag
specificgpointgingtime,gasgwellgasgreportinggthegpastgresultsgofgthegorganization‘sgoperationsg(i.e.,ghow
gwellgitghasgdonegfromgagfinancialgviewpoint).

,1-
6.gFinancegfocusesgongthegalternativegsourcesgandgusesgofgthegorganization‘sgfinancialgresources.gOb
taininggfundsgwhengneededgfromgappropriategsourcesgandgthegdeploymentgofgresourcesgwithingthegor
ganizationgfallgundergthisgheading.gIngaddition,gfinanceginvolvesgthegfinancialgmarketsg(suchgasgstoc
kgandgbondgmarkets)gthatgprovidegagmeansgtoggeneratinggfundsgforgorganizations.

1-
7.gYes.gAchievinggtheggoalsgofgthegorganizationgrequiresgfinancialgplanning.gFinancialgmanagementg
providesginformationgforgmanagersgtogusegingmakinggtheirgdecisions.gItghelpsgmanagersgbygprovidi
ngginformationgongtheglikelygfinancialgimpactgofgeachgproposedgalternative.gItgalsogprovidesginforma
tiongaboutgfinancialgstability,gefficiency,gandgeffectiveness.

1-
8.gClearly,gwegmightgexpectgsomegpublicgservicegorganizationsgthatgaregproprietary,gsuchgasgsomegh
ospitals,gtogearngprofits.gButgwhatgaboutgothergpublicgservicegorganizationsgsuchgasgcharities?gTheygs
houldgmakegagprofitgasgwell.gProfitsgprovidegagsafetygmargingagainstgunexpectedgcosts,gprovidegreso
urcesgtogreplacegbuildingsgandgequipment,gandgtogexpandgandgimprovegservices.

1-9.g Federalggovernmentg(seegtextgFigureg1-1)
 Individualgincomegtaxes
 Socialginsurancegtaxes
 Corporategincomegtax

Stategandglocalggovernmentg(seegtextgFigureg1-4)
 Salesgandggrossgreceiptsgtax
 Federalggovernment
 Propertygtaxes
 Individualgincomegtaxes

Healthgsectorg(seegtextgFigureg1-6)
 Privateginsurance
 Medicare
 Medicaid
 Otherggovernmentgprograms

Not-for-profitgsectorg(seegtext)
 Privategpaymentsgforggoodsgandgservices
 Governmentgpaymentsgforggoodsgandgservices
 Donations

1-
10.gFederalggovernmentgspendinggexceededg$6gtrillionging2020gandgstategandglocalggovernmentgspend
inggwasgmoregthang$3gtrillionging2018.g Ingcontrast,gthegGDPgwasg$21gtrillionging2020.g Forgmoregupgt
ogdateginformation,gexaminegthegstatisticalgtablesgofgthegmostgrecentgEconomicgReportgofgthegPresid
ent,gwhichgisgavailablegonline.

1-
11.gThegreportedgsurplusgincludesgbothgongandgoffgbudgetgitems.g Socialgsecuritygtaxesgrepresentgang

, offgbudgetg itemg thatg untilg recentlyg raisedg moreg revenueg thang wasg spentg ong socialg securityg payme
nts.