Identify the GAAP used to create the financial plan, and provide one Assignment

Identify the GAAP used to create the financial plan, and provide one recommendation for Patton-Fuller Community Hospital based on their 2009 budget statement for improving - Assignment Example A financial plan is a succession of steps or objectives set by businesses or individuals to describe a progressive or cumulative attainment of a certain financial accomplishment (Lucy, 1999). These financial objectives and forecast are aimed at improving the financial position of the individual or organization through acquisition of new assets or elimination of debt. Various GAAP are instrumental in the preparation of GAAP. Principle of continuity- The principle of continuity assumes that the business or financial activities of an individual are continuous (Hirschey, 2009). This principle eliminates complexities that may be associated with discontinuity. Principle of periodicity- The principle of periodicity allows each accounting entry to be split according to periods. The principle also allows accountants to utilize the cyclic nature of business occurrences. Patton – Fuller community hospital has continuously provided quality medical services to people living in Kelsey and the immediate environment since 1975 (Apollo Group, 2006). To maintain its standards of operation, the hospital needs to have an economically viable financial plan. According to the 2009 budget plan, there is lack of consistency and continuity of the financial projections of the hospital. To maintain its position, the hospital needs to balance its organization and institutional roles. Financial accountants assume that a business will remain in operation within the forthcoming business period, when preparing its financial statements. On the other hand, the financial statements should indicate whether the business is likely to close down. In the 2009 financial budget, Patton – Fuller Hospital’s auditor did not evaluate the sustainability of the business in the near future. In this case, the auditor did not evaluate the hospitals