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finance chapter 3 Flashcards

1
Q

The — are used to prepare the financial statement
A. General ledger
B. The books
C. Source documents

A

B

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2
Q

2.___ are simply a summary of all the transactions recorded in the books, and they reflect the soundness of the organizations financial statues
A. The books
B. Financial statement
C. Assets

A

B

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3
Q
  1. the ___ and ___ are prepared according to a series of rules known as the GAAPS
    A. Books & financial statement
    B. Source documents and books
A

A

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4
Q

Entity is a basic concept of accounting, under which the nursing facility is regarded as a whole, entirely separate from the affairs of the ?
A. Owners, managers and or other employees
B. Revenues & expenditures

A

A

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5
Q
  1. — accounting reports for a facility be prepared in the same way from year to year in order to compare accurately the reports between two or more different time period
    A. Consistency concept
    B. Time period concept
A

A

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6
Q
  1. — is the interval covered by the financial report usually 1 year. This period should be consistent from 1 year to the next fiscal year (12 month)
    A. Consistency concept
    B. Time period concept
A

B

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7
Q

.”pieces of paper” are the objective evidence of the transaction
A. Source documents
B. Objective evidence

A

A

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8
Q

2 systems of accounting, the difference between the 2 are the time period
A. Cash and accrual
B. Cash and revenues

A

A

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9
Q

___ the money coming in to the facility can be recorded for the period when for example the money from resident care is earned
A. Revenues
B. Expenses
C. Expenditure

A

A

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10
Q

.— money spent by the facility and can also be recorded in 2 ways.
A. Expenses
B. Revenues
C. Expenditure

A

A

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11
Q

.— can be recorded when payment is made for items purchased & can also be recoded when the items purchased are actually used up by the facility
A. Expenses
B. Revenues
C. Expenditure

A

A

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12
Q

Accounting terminology for money paid out is called an?
A. Expenses
B. Revenues
C. Expenditure

A

C

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13
Q

.— expenses are recoded when the cash is actually disbursed & revenues are recoded when the money from, for example resident series is received by the facility.
A. Cash accounting
B. Accrual accounting

A

A

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14
Q

.— do not recognize those expenses that are prepaid such as insurance
A. Cash accounting
B. Accrual accounting

A

A

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15
Q

.— does not recognize the very real cost of depreciation of the facility building or plant major equipment or other capital items.
C. Cash accounting
D. Accrual accounting

A

C

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16
Q

Does not recognize money that is owed to creditors by the facility known as accounts payable a deferred expense or money that is owed to the facility by resident for services
E. Cash accounting
F. Accrual accounting

A

E

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17
Q

revenues are recoded when they are earned and expenses when they are incurred, regardless of the time the cash transactions tale place.
A. Cash accounting
B. Accrual accounting

A

B

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18
Q

expense can now be more precisely stated as a cost that is use up or
A. Expensed
B. Expenditure

A

A

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19
Q

.— system requires that every expense incurred by the NF be attributed to the period, usually the month in which it is incurred and all revenues to the month in which series are rendered.
A. Cash accounting
B. Accrual accounting

A

B

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20
Q

accountng process involves 2 main steps: keeping the books and preparing the —-
C. The books
D. Financial statement
E. Assets

A

D

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21
Q

– is a system of recoding all revenues and expenses and matching those revenues to expenses during the same time period
A. Financial statement
B. Bookkeeping

A

B

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22
Q

summaries of the NF summary financial wellbeing within a time period
A. Financial statement
B. Bookkeeping

A

A

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23
Q

is a simply a list of every account in the facility, 6 main groups
A. Bookkeeping
B. Chart of accounts

A

B

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24
Q 
- owned by the facility
A.	Assets
B.	Liabilities
C.	Revenues
D.	expenses
A

A

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25
Q 
Things owed by the facility or its obligations
A.	Assets
B.	Liabilities
C.	Capital 
D.	Revenues
A

B

26
Q 
money invested in the facility also known as the facility net worth
A.	Assets
B.	Liabilities
C.	Capital 
D.	Expenses
A

C

27
Q 
earnings from operations or other sources
Assets
A.	Liabilities
B.	Capital 
C.	Revenues
D.	Expenses
A

C

28
Q 
costs of salaries supplies and so on that have been used up
A.	Assets
B.	Capital 
C.	Revenues
D.	Expenses
A

D

29
Q 
Any funds that have been established for restricted or unrestricted uses
A.	Liabilities
B.	Revenues
C.	Expenses
D.	Fund account
A

D

30
Q

.— are any transaction that takes place will affect some account.
A. The journals
B. liabilities
C. expenses

A

A

31
Q

are the first place the transaction are recoded, they are the books of original entry, each facility ill have its own system of journals
A. The journals
B. liabilities
C. expenses

A

A

32
Q 
records all cash received for services provided, example sales by refreshment machines
A.	Cash receipts journal
B.	Billing journals
C.	Accounts payable journal 
D.	cash disbursement journal
A

B

33
Q 
lists all bills sent for services rendered
A.	Cash receipts journal
B.	Billing journals
C.	Accounts payable journal 
D.Cash disbursement journal
A

C

34
Q 
records all payments made for services and supplies used for resident care and for all other operations of the facility
A.	general journal 
B.	Payroll journal
C.	Accounts payable journal 
F.	cash disbursement journal
A

F

35
Q

summarizes all payroll checks distributed during the pay period
G. general journal
H. Payroll journal
I. Accounts payable journal

A

H

36
Q

a record of no repetitive entries
J. general journal
K. Payroll journal
L. Accounts payable journal

A

J

37
Q

the journals are characterized by another concept of accounting: – for each transaction – are made in the appropriate journal a debit and a credit
A. General journal 2 entries
B. Double entry book keeping, 2 entries

A

B

38
Q

.debit in accounting simply means the – side of the journal & the Credit refers to the — side of the journal/ for every debit entered one or more credits are entered that equal the debit and vice versa
A. Left and right
B. Right and left

A

LEFT AND RIGHT

39
Q

the credit in the — would not be due to an increase in revenue but to a decrease in accounts receivable
A. General journal
B. Payroll journal
C. Cash receipts journal

A

C

40
Q

the – records transactions that do not properly fit into any of the other journals. This journal is used to make adjustments in the books
A. General Journal
B.Payroll journal

A

A

41
Q

in addition to adjustments for inventory entries for depreciation and prepaid expenses are also recorded in the ___ to reflect the cost of using the plant or equipment over the time period
A. General journal
B. Payroll journal

A

A

42
Q

General Journal can be used to —- made in other journals. Accounts are usually repeated from month to month and therefore should be standardized
A. Correct errors
B. Adjusting entry

A

A

43
Q

the — can be thought of as a summary of all debits and credits contained on the journals for the time period.
A. General journal
B. General ledger

A

B

44
Q

should be arranged in the order in which the accounts will appear in the financial statements
A. General ledger
B. General journal

A

A

45
Q

what are prepared directly from the general ledger
A. Income statement and balance sheet
B. Financial statement and income statement

A

A

46
Q

shows whether revenues were sufficient to cover expenses, whether the facility made or lost money during the time period.
A. Income statement
B. Balance sheet
C. Financial statement

A

A

47
Q

in accounting income does not refer to funds coming into the facility but to— or profit loss experience by the facility

A

REVENUES - EXPENSES

48
Q

revenues are listed first on the —usually starting with the largest source of revenue
A. income statement
B. balance sheet

A

A

49
Q

when closing the books revenues and expense must be measure for finite periods of time, these accounts must be brought to a sum of?
A. 0
B. 1
C. 2

A

A

50
Q

the balance sheet must balance with the liability and capital accounts the accounting equation is

A

Assets=Liabilities + Capital

51
Q

51.current assets refers to theose possession of the facility that will be or theoretically turned into cash with how many months
A. 12
B. 6
C. 9

A

A

52
Q

52.noncurent assets refers to those asses that will not be liquidated within
A. 1 year
B. 6 months

A

A

53
Q

summarize the balance sheet shows the financial position of the facility for only one point in time. Basic accounting equation can be expanded to:

Assets= (liabilities +owners equity) + (revenues – Expenses)

A

P.228

54
Q

working capital refers to the current assets and current liabilities form the balance sheet
Current assets- current liabilities p.228

A

$403,898/$367,00 =1.1 ( good ratio)

55
Q

Current ratio greater than 1 shows the laurels are able to meet its current obligations. 2.5 or greater shows has to much money tied up in current assets.

Current ratio= current assets/ current liabilities

A

P.228

56
Q

if its lower than 1 the laurels need to rethink the amount of funds it is keeping available quick ratio=(cash accounts receivable+ marketable securities)/ current liabilities p.228

A

60,700+53,519+25,275)/139,494=0.4

57
Q

average payment period ratio is the accounts payable average payment period which shows the average age number of days used to pay creditors
= 365xaccounts payable/supplies expense. 228

A

= 365x$2852/$31,393

=33 days

58
Q

— is the proportion of revenues earned to the amount of expense used to earn those revenues

A

net operating margin ratio

59
Q

debt to equity ratio measures of the long run liquidity of the ability of the facility to meet its long term debts.
Small debt indicates that the facility could incur more long term debt
High debt shows that the facility may have debt than may be advisable

Debt/equity=long term debt/ total equity P.228

A

=$4135,202 / 435299,50

=1.17

60
Q

3rd method of analyzing the financial statement is to perform a —. This converts each item in the income statement balance sheet or other financial report to a percentage of some total item on the same document
A. Vertical analysis
B. Income statement

A

A

NHA (4 decks)

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