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Properties owned by the business such as supplies and equipment are known as

answer

assets

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The purpose of cost analysis is to determine the

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cost of each service

question

financial records should provide

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amount collected/earned during given period, and where expenses were incurred

question

an unwritten promise to pay a supplier for property or merchandise purchases is

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accounts payable

question

an itemized statement of the assets, liabilities, and owners equity of a medical facility as of a specified date

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balance sheet

question

financial statement showing net profit or loss

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income statement

question

costs that vary in direct proportion to patient volume

answer

variable costs

question

categorizes and records all checks written

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check register

question

formula that measures the speed in which outstanding accounts are paid

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A/R ratio

question

the purpose of this is to determine the cost of each service

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cost analysis

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an itemized statement of assets, liabilities, and owners equity, also called the statement of financial condition

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balance sheet

question

system of reporting income where income is recognized at the time the money is collected

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cash basis

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cost that do not vary in total as the number of patients varies

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fixed cost

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system of monitoring the financial status of a facility and the financial results of its activities, providing information for decision making

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accounting

question

debts and other financial obligations for which one is responsible

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liabilities

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formula that shows the percentage of outstanding debt collected

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collection ratio

question

properties of value that are owned by a business entity

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assets

question

created by totaling debit balances and credit balances to make sure that total debits equal total credits

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trial balance

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the amount by which a business assets exceed the business liabilities

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owner's equity

question

formula that shows the cost of a procedure or service and helps determine the financial value of maintaining certain services

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cost ratio

question

system of reporting income where income is reported at the time charges are generated

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accrual basis

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a review of medical services before they can be performed

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utilization review (UR)

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Four bookkeeping systems that are appropriate for use in a medical clinic

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single-entry system, pegboard system, double-entry system, total practice management system

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codes that a computerized accounting system generates that will facilitate billing are

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codes to identify place of service and professional performing the service

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four types of financial documents

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payroll, purchases, bookkeeping and accounting (income/expenses)

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three ways computer service bureaus handle accounts from medical facilities

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through clinics terminal, online servicing clinic terminal that has direct communication with service bureaus, through offline batch processing where MA or bookkeeper sends daily batches of data to bureaus for processing

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four steps that help reduce embezzlement

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seek honest employees, separate duties among employees conduct regular and irregular audits of practice accounts, consider not using signature stamp, bank should have list of authorized employees to sign checks

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type of bond that covers position rather than individual

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position-schedule

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type of bond that covers all employees

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blanket-position

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type of bond that covers specific people by name

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personal

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it is important to implement and track budgets for specific categories of income and expense in the ambulatory care setting

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so that the monies in = monies out

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expenses that do not vary in total as the number of patients seen by the medical practice grows or shrinks

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fixed costs

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expenses that are directly affected by patient volume

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variable costs

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examples of fixed costs

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medical benefits, magazine subscriptions, monthly phone bill, printing of educational brochures, property taxes, monthly janitorial services

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example of variable costs

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interpreting lab test results, purchase of reagent test strips for urinalysis, purchase of open-shelf lateral files, adding new positions(MA clinical)

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they system that is based on the accounting principle that assets equal liabilities plus owners equity is the

answer

double-entry system

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double-entry system is

answer

accurate, more time consuming, bookkeeping has checks and balances

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owners equity is the same as

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net worth, proprietorship, capital

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bonds may be purchased to protect the practice from

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financial loss, embezzlement

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a total practice management system has the ability to

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process claims electronically, manage payroll and purchases, generate financial records

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computerization of medical facilities has increased because of

answer

emphasis being placed on the accurate documentation of medical records, increase in manages care plans

question

the trial balance is created by

answer

totaling debit balances and credit balances to confirm that total debits equal total credits

question

providers should purchase fidelity bonds because they

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will reimburse the practice for any monetary loss caused by the practice's employees

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a proper contract should be negotiated and signed with any computer and billing service bureau because it

answer

ensures confidentiality and strict privacy of patient information, is in compliance with HIPAA

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financial records should provide

answer

amount earned, owed and collected within a given period, and where expenses were incurred

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a hospital cost report for Medicare is part of

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financial accounting

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accounts receivable trial balance

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shows any problems between the daily journal and the ledger

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calculating and reviewing cost provide ambulatory care settings with

answer

data to set fees monitoring of the practices performance

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salary calculations, withholding taxes, and Social Security calculations are the responsibility of the

answer

office manager

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accounts ___ is the amount the provider is owed by patients

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receivable

question

the purpose of cost analysis is to

answer

determine the costs of each service

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a review of the patient service required before it may be actually performed is known as

answer

utilization review

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the ____ formula shows the cost of a procedure or service

answer

cost ratio

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this is designed to cover specific individuals by name and generally requires a personal background investigation

answer

personal bond

question

single-entry system

answer

includes daily journal or log, patient statements or accounts ledgers, checks and disbursement (expenditure) records

question

single-entry system

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provides chronological record of financial transactions that is transferred from the journal to a ledger

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single-entry system

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all amounts entered in the journal must be posted to the accounts kept in the ledger to summarize the results

question

pegboard system

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"write it once" is easier to use than single-entry system and has greater internal controls

question

pegboard system

answer

is accurate because data is entered at the time of service and is not recopied so fewer errors can creep in

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double-entry system

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based on the fact that transaction has two aspects, (assets = liabilities + owners equity)

question

assets

answer

the properties owned by the business (supplies, equipment, accounts receivable)

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liabilities

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what is owed to creditors

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owners equity

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amount the business assets exceed the business liabilities

question

double-entry system

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both sides be recorded and must be in balance, provides a comprehensive financial picture picture and has built in accuracy controls

question

the majority of medical practices rely on accounting software packages to prepare financial records such as

answer

total practice management systems

question

patient info (data scheduling), EMR, EHR, insurance coding/billing claim processing, HR payroll personnel records, bookkeeping/Accounting are included in

answer

total practice management systems

question

has the capability of including the most common procedure and diagnostic codes within a database to be recalled when completing insurance claim forms, assists with appropriate diagnosis codes

answer

total practice management systems

question

used in preparation of billing statements, insurance forms, collection letters and other financial ratios and statements to assist in monitoring the practices financial stability is

answer

total practice management systems

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require the administrative medical assistant to total the summaries that are shown at the bottom of the day sheet

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pegboard systems

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if the amount of the error is divisible by 9

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there may be an error in transposition of numbers

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if the amount of the error is divisible by 2

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the amount may have been posted in the wrong column

question

steps to create the trial balance

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pull accounts that have a balance, total accounts, create accounts receivable total,

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an unwritten promise to pay a supplier for property or merchandise purchased on credit or for a service rendered

answer

accounts payable

question

records all checks written and categorizes them into separate columns, such as rent, insurance, office supplies, utilities

answer

check register

question

___ is included on pegboard checks that copies the date, payee and check number and the amount to the check register

answer

NCR

question

system of monitoring the financial status of a facility and the financial results of its activities

answer

accounting

question

provides information primarily for entities external to the organization such as the government

answer

financial accounting

question

generates financial information that can enable more efficient internal management

answer

managerial accounting

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helps to determine what it costs the ambulatory setting to perform particular services and is an integeral part of managerial accounting

answer

cost accounting

question

a hospital cost report for Medicare is essentially a part of _________ because the report is generated for an external user

answer

financial accounting

question

used to determine the cost of each service

answer

cost analysis

question

costs that do not vary in total as the number of patients vary

answer

fixed costs

question

vary in direct proportion to patient volume, such as clinical supplies and laboratory procedures

answer

variable costs

question

indicators of the financial status of the medical facility include

answer

financial statements

question

used to provide a source of data for use in the preparation of various reports

answer

financial records

question

most commonly generated year-end report

answer

income statement

question

shows the cumulative profit and total expenses by reporting patient income, outside revenue sources, and overhead expenses such as office and medical expenses

answer

income statements

question

itemized statement of the assets, liabilities and owners equity of a medical facility as of a specified date

answer

balance sheet

question

each ledger or journal entry should have

answer

1) date of transaction 2) journal or ledger account names involved 3) dollar amount of the charges 4) brief explanation of the transaction

question

reports income at the time charges are generated, used mainly in commercial environments.

answer

accrual basis

question

most often used in medical practices, income is recognized when money is collected

answer

cash basis

question

formula that measures the speed in which outstanding accounts are paid

answer

accounts receivable ratio (A/R)

question

A/R ratio

answer

total A/R __________ = turnaround time monthly receipts

question

shows the percentage of outstanding debt collection, goal is 90%

answer

collection ratio

question

Collection Ratio

answer

total receipts ___________ =collection ratio after adjustments total charges

question

to decrease the opportunity for embezzlement

answer

regular/irregular audits separate duties among employees, one person to use signature stamp

question

the administrative medical assistant is likely to be involved in making certain the ___________ is completed by all employees

answer

W-4 form, Employee's Withholding Allowance Certificate

question

are assigned to the office manager because of the privacy of salary issues Social Security # and confidentiality of the employee's tax information

answer

payroll tasks

Accounting Practices CH 21 – Flashcards

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