Acc 561 Week 1 Happy Home Accounting Decisions

Happy Home Accounting Decisions



July 9th 2010
Martin Ginsburg

Happy Home Accounting Decisions

    Happy Hospital is a medium sized hospital with a community focus. The hospital has affiliations with a number of other hospitals and care facilities. This paper will address how Happy Hospital makes accounting decisions when looking at budgets, performance reports, ethics, and information sources.
Budgets And Performance Reports In Decision Making
Decision making in business is a critical thinking skill: information is analyzed, alternatives are explored and a final decision is made. Accounting information can be one of the information sources evaluated in decision making. Accounting can be broken down into financial accounting that looks backward and managerial accounting that looks forward (Finkler & Ward, 2006). Especially in managerial accounting, information is gathered for decision making. As Waddle (2009) states, having good information is key to making good business decisions.
Happy Hospital uses budgets at the beginning of a year to allocate money to departments and resources. This allocation is influenced by decisions to expand specific departments or resources. Before a decision is made and any action undertaken, the implications of a decision can be thought through. For example, Happy Hospital uses budget calculations when deciding which electronic patient record software to purchase.
Happy Hospital uses accounting information to calculate performance reports of its departments at the end of the year. This information is used for strategic planning. For instance, Happy Hospital may choose to discontinue financing a department because the department shows poor performance.
Influence of Ethics on Decision Making
Ethical dilemmas are frequent in decision making, especially in health care decisions. Considering costs when making a decisions about patient care creates ethical tension. After all, one likes to do what...