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