Kinn’s Chapter 24 – Flashcards
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accounts payable
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Debts incurred and not yet paid.
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accounts receivable
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Amounts owed to the physician
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accounts receivable trial balance
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A method of determining that the journal and the ledger are in balance.
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assets
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The entire property of a person, association, corporation, or estate applicable or subject to the payment of debts. ( valuable )
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balance sheets
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A financial statement for a specific date that shows the total assets, liabilities, and capital of the business.
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bookkeeping
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A record kept of business and accounting transactions.
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cash basis of accounting
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A method of accounting in which income is recorded when received and expenses are recorded when paid.
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cash flow statement
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A financial summary for a specific period of time that shows the beginning balance on hand, the receipts and disbursements during the period, and the balance on hand at the end of the period.
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controls
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A standard of comparison to make sure answers obtained are accurate.
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disbursements journal
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A summary of accounts paid out.
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entry
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A record or notation of an occurrence, transaction, or proceeding.
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equities
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the monetary value of a property or of an interest in a property in excess of claims or liens against it.
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in balance
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The state in which the total ending balances of patient ledgers equals the total of accounts receivable.
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invoice
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A paper describing a purchase and the amount due.
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liabilities
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things that are owed, debts.
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petty cash fund
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A fund maintained to pay small, unpredictable cash expenditures
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statement
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a request for payment
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statements of income and expense
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a summary of all income and expenses for a given period.
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subsidiary
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Supporting other documents or records. ( putting something in place to help something else.
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trial balance
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A method of checking the accuracy of accounts.
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fiscal
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An accounting period of 12 months when a company determines earnings and profit; the fiscal year does not necessarily begin in January; the business determines the beginning of its fiscal year.
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Financial records show show the following at all times:
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a. How much was earned in a given period. b. How much was collected c. How much was owed d. The distribution of expenses incurred.
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When writing numbers keep the columns straight and write:
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well-formed figures
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The manual disbursement journal must show:
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a. Every amount paid out b. Date and check number c. Purpose of the payment
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Name two common accounting systems used in medical offices.
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Single-entry system Double- entry system
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What is the differences between accounting and bookkeeping?
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Accounting is a four staged process and bookkeeping is the recording stage of the accounting.
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List three cardinal rules of bookkeeping:
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a. Use good penmanship, so that the records are clearly legible. b. Keep columns of figures straight and write well formed figures. c. Carry decimal points correctly.
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The IRS requires that complete records be kept on all employees, including the following:
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a. Total earnings of the employee b. Number of withholding allowances claimed c. Marital status of the employee d. length of the pay period involved
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What is Form 940 used for and when must it be filed?
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Federal Unemployment Tax and on or before January 31st.
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List seven expense categories often found in a physicians office budget:
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1. Insurance 2. Loan payments 3. Advertising and promotions 4. Legal and accounting 5. Supplies 6. Salaries and wages 7. Taxes
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Single-entry system
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is very basic and usually used in small businesses. Single entry systems are inexpensive, easy to use, and require little training.
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Double-entry system
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is also inexpensive but requires a trained, experienced bookkeeper or the regular services of an accountant. Transactions must be recorded manually or by computer.
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Pegboard/ write- it- once system
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is at the bottom of the day sheet and has 3 sections, that will show that the accounts have balanced for the day.
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SS-5
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SS-5 Form is for a person to apply for a social security number if they do not have one.
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W-2
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Employer is required to furnish 2 copies of Form W-2, which is the wage and tax statement, this is for who income tax would or could be withheld.
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W-3
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Emploers must file Form W-3, the Transmittal of income and Tax statement, annually to transmit wage and Form W-2 to the social security administration.
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W-4
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Employee's withholding allowance certification showing the number of withholding allowances claimed.
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Accounting
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is a system of recording, classifying, and summarizing financial transactions.
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Bookkeeping
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is the record part of the accounting process. Must be done daily
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Checkbook
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Receipts usually are deposited in the checking account, and a record of the deposit is entered in the journal and on the check register.
