Finance Flashcards
How often do residents statement funds/ accounting funds need to be provided to them?
Quarterly (every three months).
Money of a deceased/ discharged resident being held by facility must be refunded when?
Within 30 days.
Average length of stay equation?
Total patient days divided by number admissions in the year.
Example Total patient days = 30,000 Number of annual admissions = 1200
Whats the average length stay for a total patient days = 30,000 Number of annual admissions = 1200
30,000 / 1200= 25 days average stay per resident
Accrual accounting Systems
Nursing homes must use the accrual system
Different types of book keeping
Journals, and General Ledgers
Journals includes…
- Books of original entry
- General Journals
- Prepaid expenses
- Entries that don’t fit in other journals
- Corrects errors in the other journals
General Ledger includes…
- Summarizes debits and credits
- Organized by account/ GL code
- Operating expenses and income
- Organized by vendor name and GL code
Chart of accounts
listing of all the revenue and expense codes so you can code your invoices and find the information on he general ledger and Profit and loss.
Accounting process
Reporting financial results
* must produce the profit and loss statement and balance sheet to investors.
Profit and loss statements (income statements) show what?
How much you made…
- Operating revenues
- Ancillary revenues
- Operating expenses
- Profit/ Income
- Loss
- Shows rather your revenues covered your expenses
What must match on the Profit and loss statement?
Revenues and expenses for that month
How often is a P&L produced?
Each month.
What does your Balance Sheet show?
What you are worth…
- Net worth/ equity
- assets
- liabilities
- capital
What shows financial condition?
Balance sheet
What shows net worth and solvency?
Balance Sheet
How often is the balance sheet produced?
Every 3 months
Accounting equation for assets
Assets = liabilities + Capital
Accounting equation for working capital
Current assets- current liabilities= working capital
Accounting equation for current ratio
Current assets / current liabilities = current ratio
Whats the purpose of working capital?
To show you how much you have available to buy equipment r invest in business
Whats the purpose of Current ratio?
Shows whether you are solvent and can pay your bills.
* Example: a 1.0 to 1.0 means break even. 2.0 to 1.0 means you have 2 dollars for every dollar of debt.
Accounting equation quick ratio or acid test ratio
Cash + accts receivables + money market funds/ current liabilities
Whats the purpose of quick ratio or acid test ratio
Calculates your most liquid assets
