Chapter 33// Accounts payable and accounting procedures

At the end of the period. typically monthly, quarterly, and annually.

when is the trail balance done

Assets

Building, equipment, cash

Corporation

Business organized under state law as a separate legal entity, with ownership divided into transferable shares of stock.

Proprietorship

Business owned by one person, who is often the manager/operator of the business; the owner's net worth or equity. (which consists of the amount by which the fair market value of all assets exceeds liabilities)

Partnership

Business owned by two or more persons; each person is generally personally liable for the debts of this entity.

(Paid-in) Capital

Cash or other assets from stockholders in exchange for capital stock.

Invoice

A form describing the goods or services sold, the quantity, and the price

daily balancing

A integral function of financial responsibilities in the practice.

Be highly organized

A medical assistant working in accounts payable should:

Petty cash

A small amount between $25 and $75 of stored cash often used for postage stamps, inexpensive office supplies, and small charitable donations.

Pegboard, single entry, and double entry

Accounting systems

Practice Manager

Accounting systems DO NOT include...

Expenditure

Acquired material, property, or labor in exchange for money.

Pegboard

Although not as commonplace today, the _____ bookkeeping systems have been used effectively for many years, are relatively inexpensive, provide hard copies for account balances, and are easy to use.

Write-off

An example of a bad debt _____ would be if a patient owes the office $200 and the patient dies unexpectedly, leaving the remaining balance of $200 uncollectible.

Accounting Formula

Assets + Liability = Net Worth

evaluation by demonstrating whether the benefits received out weighs the cost.

Cost analysis enables

Advanced, complex type of cost analysis

Cost-benefit analysis is NOT what?

Liabilities

Creditors, mortgage, etc.

Balancing

Daily _____ is an integral function of financial responsibilities in the practice.

Cost

If an office building is bought for $700,000, the amount you paid for it is called?

$47

If the petty cash fund was originally $50, and it has been depleted down to $3, a new petty cash check should be written for how much?

$50,000

If your receipts for 4 months add up to $200,000, what is your average monthly gross production?

report the profit or loss

Income statement

Accountant

It is typically the responsibility of the _____ to produce the values used in cost-benefit analysis.

Partnership

Law firms, medical practices, CPA's

The study and analysis of financial data as it applies to operational issues within a company

Managerial accounting or cost accounting

Note payable

Money borrowed (loans) to purchase major assets

Accounts Payable or A/P

Money borrowed to purchase merchandise on credit?

Corporation

Most large companies: Wal-Mart, General Motors, General Electric, Intel, Apple, etc.

Monetary Unit Assumption

One of two main assumptions in GAAP, requiring that transaction data can only be expressed in terms.

Day to day basis for a company to conduct business

Operating information

Economic Entity Assumption

Personal living expenses are kept separate from the expenses of the business

Operating information and managerial accounting information

Two integral aspects

Assets

Resources owned by a business

2 months or less

The A/R ratio has a goal of:

Helps you understand how quickly outstanding accounts are paid as well as the effectiveness of the office collection process.

The accounts receivable ratio or R/A ratio formula

Demonstrates the cost of a specific procedure or service.

The cost ratio formula

Due Date

The date by which payment should be made is called:

gross collection ratio and net collection ratio

Two types of collection ratios

balance

The income statement does not

Accounts Payable

The medical office purchases office supplies, medications, utilities, and so on?

Stockholders' Equity

The ownership claim on total assets.

"Cash"

The petty cash fund is established by writing a check payable to "petty cash" or:

Reconciling

The process of verifying that the amounts on the bank statement are consistent with the amounts in the check register is known as what?

Monetary Unit Assumption

The quality of service provided, the age and health of the owner, and employee morale are not included because they cannot be quantified in terms of money

Retained Earnings

The section of the balance sheet is determined by three items: revenues, expenses, and dividends.

Managerial

The study and analysis of financial data as it applies to operational issues within a company is called ________ accounting.

Accounts payable

The total amount owed by the practice to suppliers and other service providers for regular business operating expenses.

A check that the debits equal the credit after posting

The trial balance is to provide

revenue and expenses

The two main GL categories that are transferred to the income statement are

income statement and balance sheet

The two most common financial statements

Market Value

The value determined by the market for similar buildings/properties at the time of sale?

Client details

When your medical office receives an invoice from a supplier, in which section does the name of the medical practice appear?

Multiply it by 100

To convert the gross collection ratio to a percentage, you what?

(Paid-in) Capital

Total amount paid by stockholders.

Net Collection Ratio

Total payments for a specific period of time divided by the total charges with the write-offs deducted.

everytime payment is made from petty cash fund

Voucher from or expenditure list should be completed how often?

Net Worth

What demonstrates the value of a business?

Net Collection

What ratio is also known as the adjusted collection ratio?

Verify everything on the invoice was received before payment

When a statement is received from a supplier, you should what?

Alphabetically by supplier name

When invoices are held for payment, they are typically filed how?

Cost Ratio

Which formula demonstrates a cost of a specific procedure or service?

Payroll

Which is NOT commonly considered an overhead expense?

Invoice Number

Which of the following is NOT included in the company details on an invoice?

1.0

Which of the following is the BEST gross collection ratio?

Charges that are deemed noncollectable by any business

Write offs

reports the assets, liabilities, and stockholders equity of a business enterprise at he specific date.

balance sheet

Required fields of an invoice

company details, invoice number, dates, client details, fees, and payment terms.