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.
