Chapter 30- Admin Procedures Flashcards
Accounting
(there are distinct differences between bookkeeping and accounting. The accounting process includes the bookkeeping function and much more. )
Accounting involves the entire process of identifying, recording, and communicating economic event
Bookkeeping
involves only the recording of economic events.
Accounting Formula
the formula that is considered the basis for all financial accounting, which is assets- liabilities= net worth.
Assets
items company owns that can provide future economic benefit
Liabilities
what you owe other parties
Accounts receivable ratio
the total dollar amount of the outstanding payments or claims due to the office from patients and customers;
Current A/R Balance÷Average Monthly Gross Production=A/R Ratio.
Balance Sheet
also known as a “statement of financial position”;
reveals a company’s assets, liabilities and owner’s equity (net worth).
Collection Ratio
a formula that determines how efficiently and timely an office is collecting payments for services rendered by the physicians.
Cost Ratio
a formula that demonstrates the cost of a specific procedure or service.
cost-benefit analysis
an analysis that allows for program evaluation by demonstrating whether the benefits received will outweigh its costs.
depleted
consumed, emptied
double-entry
an accounting method of recording transactions that provides an equality of debits and credits.
Using the double-entry system provides the two-sided (dual) effect of each transaction being recorded in the appropriate accounts.
The double-entry system is universally used and provides a logical method for recording transactions and a means of proving the accuracy of the recorded amounts.
equity
a value of property beyond the total amount owed on it; net worth
expenditure
actual payment of cash or cash equivalent for goods or services,
(action of spending funds)
