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Kinn’s Chapter 24

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

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