chapter 19 study guide
What is a stale check?
A check that has not been presented for payment within the time suggested
Which of the following is the best example of the separation of duties?
A medical assistant endorses a check for the office manager to deposit.
What is magnetic ink character recognition (MICR)?
A system of combining characters and numbers
Martin is the head of the accounting department at a medical practice. A new intern has been assigned to the accounting department. She has questions about the difference between accounts receivable (AR) and accounts payable (AP). Which of the following statements made by Martin would best help clarify the intern's queries regarding the two financial records?
AR is money owed to the medical practice, whereas AP is money the medical office owes to others
When should a medical assistant reconcile a bank statement?
According to office policy
Which type of expense would not be included in the schedule of recurring monthly expenses in the accounting software?
Annual lease renewal
When should a check that arrives in a medical office be endorsed?
As soon as it is received
A medical office would not use which of the following types of check endorsements?
Blank
Where should blank checks be stored?
In a locked cabinet
Where is the check number located on a check?
In both the upper right corner and the Magnetic ink character recognition (MICR)
Russell is a non-exempt employee at the Wesley General Hospital. This would imply that Russell, most likely, ________.
Is paid over time hours
What is the risk of accepting a check that the patient has marked "Paid in Full"?
It acknowledges that the patient has paid the bill in full even if this is untrue.
Which of the following is not an example of a recurring monthly expense?
Large equipment purchases
Because the amount does not vary each month, which of the following recurring monthly expenses would be a good candidate for automatic payment?
Rent
Which type of check endorsement is considered the safest?
Restrictive
Which of the following is not a component of the check stub?
The MICR number
Daniel is filling out a deposit slip for a check he is about to deposit in his bank account. He applies the endorsing stamp to the back of the check. Which of the following is a reason for this step?
The check was not previously endorsed
Johan, the owner of a small medical supply store and has two additional employees. He wants to hire an agency to manage his payroll. However, his accountant disagrees and tries to encourage Johan to use the manual payroll system instead. Which of the following statements is accurate and will help the accountant convince Johan that the manual payroll system is the better choice?
The manual payroll system is ideal for small offices with few staff members
Which of the following statements about writing a check is incorrect?
The medical assistant should use blue ink for writing checks.
What is the "trailing edge" of a check?
The proper location for the endorsement
Which of the following is not a purpose of the Magnetic Ink Character Recognition (MICR) on a check?
To help the payer keep track of his or her checks
What is the main purpose of reconciling a bank statement?
To identify and correct errors
What is the main purpose of using a restrictive endorsement of a check?
To prevent the check from being cashed by a third party
Which of the following statements is true about internal controls in a large medical office?
Two people should be assigned to count the cash at the end of the day.
When is it appropriate for a medical office to accept a third-party check?
When the check comes from an insurance company
The medical assistant makes a spelling error while writing the payment amount on a check. How should the medical assistant proceed?
Write VOID in ink on the check and keep it until the bank statement is reconciled.
which of the following is not a special purpose check?
account check
The general term that refers to the money the office owes to others and the payment of bills is _____________.
accounts payable
The money owed to the medical practice for services provided is called ___________
accounts receivable (AR)
The American Bank Association (ABA) number identifies the
bank on which the check is drawn.
To be considered a negotiable instrument, a check does not need to:
be issued by a bank in the same state.
To be considered a negotiable instrument, a check must meet all of the following criteria except
be signed on the front by the payee.
After totaling the amounts on the deposit slip, the medical assistant's final number is off by a few cents. The medical assistant should do all of the following except:
change the total on the day sheet.
The check was not previously endorsed
check 1803 has not yet been cashed
Edwardo owes a $15 copayment for his office visit. He wants to pay using a cash-back check, but the office refuses to accept it and asks him to pay by cash instead. The reason for their refusal is that Edwardo's
check unnecessarily burdens them with managing the cash box
The first step in manually reconciling a bank statement for a checking account is to:
compare the beginning balance of the current statement with the ending balance of the previous statement.
Most medical offices make bank deposits:
daily
Liam is creating a budget for the medical office in hopes of cutting out some unnecessary expenses. He first lists all of the recurring monthly expenses including office rent, utilities, large equipment purchases, housekeeping, and postage among others. While reviewing his list, he decides one of the items he listed was incorrect. Which of the following is not a recurring monthly expense?
large equipment purchases
When listing payments on a deposit slip, the medical assistant should:
list any money orders for deposit last.
A patient asks a medical assistant who is logged into the computerized accounting system for his assistance in the reception area. The medical assistant should:
log out of the system so no one can use his log in.
While reconciling a bank statement, the medical assistant sees check 1807 and check 1809, but not check 1808. Check 1808 does not appear on the statement because it is:
oustanding
The ____________ is the name and address that is printed on a bank check
payer
Joel is an accountant for Dr. Ruiz. Joel has been comparing the financial records of the clinic with the data on the bank statements. Which of the following accounting functions is he performing?
reconciliation
A(n) __________________ employee receives a predetermined amount of money every pay period that is not dependent on the number of hours worked within the pay period.
salaried
A patient who is writing a personal check for a copayment needs to identify his checking account number. The medical assistant informs the patient that the account number is the:
second series of numbers along the bottom of the check.
When completing the "Pay to the order of" line on a check, the medical assistant should
spell the payee's name correctly.
A medical assistant should never accept a check:
that exceeds the amount the patient owes.
An endorsement can be all of the following except
the payee's initials.
In relation to check writing, the third party refers to the:
unknown party.
The first step in preparing a deposit slip is to:
verify that each check has been endorsed.
According to federal banking regulations, the endorsement is placed
within the top 1.5 inches on the left side of the back of the check.
When endorsing a check that arrives in the medical office, the medical assistant should:
write or stamp "For Deposit Only" on the check.
Shelley is an accountant at a drug store. The method that she uses involves recording an increase in expense (debit) and its offset by a decrease in assets or increase in liability (credit). This would imply that Shelley is using the ____
double-entry bookkeeping