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Cash versus Accrual Accounting

Consider a health care organization with which you are familiar with and explain the difference between cash and accrual accounting in health care setting. Be sure to include a discussion of the revenue recognition and matching principles.

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Step 1
The health care organization with which I am familiar is a hospital. In this hospital the purpose of accounting is to assemble and structure information on the hospital that is needed by the hospital management accountable for the cost and quality of services delivered. In the hospital accounting information is used to reward superior performance. The challenge for the accountants is to measure health outcomes produced by medical interventions.

Step 2
In a health care organization the difference between cash basis accounting and accrual basis accounting is that in case of cash basis accounting transactions are ...

Solution Summary

This posting gives you a step-by-step explanation of accounting transactions in a health care organization. The response also lists the 2 sources used.