Financial Flashcards
1
Q
Interest Rate
A
Typically noted on an annual basis, known as an APR
a. Interest Fee
b. Interest Rate
c. Interest Charges
2
Q
Accrual based accounting
A
You purchase a large stock order of HWP for $3,000 in June. You sold all of that HWP in June, July , and August for $6500. This accounting method would show a sales of $6500 and expenses of $3000 which would result in a net profit of $3500 for the month of June. Since sales and purchases count immediately , you can record them on your books immediately and show the actual profit made for the month of June.
a. Cash based accounting
b. Accrual based accounting
3
Q
Accrual bases Accounting Method
A
This type of accounting method is able to depreciate assets.
4
Q
True
A
True / False
Over time, the revenue and expenses will be the same in both the Cash and Accrual based accounting Method.
5
Q
Yes!
Annual fixed cost $190 x 100 sq ft = $19,000
Monthly fixed cost $19,000 / 12 = $1583.33
Monthly revenue $9989 - $1583.33 - 525 = $7880.67
A
Is the Dental Center profitable?
produced revenue of $9989
used 100 sq ft of practice
Annual fixed costs/sq ft $190
Monthly Variable costs of dental center of $525
6
Q
Profit and Loss Statement
A
Which Financial Statement is considered the most important for small businesses?
a. Cash Flow Statement
b. Balance Sheet
c. Profit and Loss Statement
7
Q
Variable
A
Is staff payroll considered a fixed or variable expense?
8
Q
Both employer and employee
A
The Federal Insurance Contribution Act - or FICA - is a payroll tax that is paid by;
a. Employer
b. Employee
c. Both Employer and Employee
9
Q
Federal Unemployment Tax Act - FUTA
A
Which payroll tax is paid by employers only and only on the first $7,000 of an employees earnings?
a. State Unemployment Tax Act (SUTA)
b. Federal Unemployment Tax Act (FUTA)
c. Workers Compensation Tax
10
Q
It is a business identification number assigned by the IRS to identify tax accounts of employers
A
What is an Employer Identification Number (EIN)
a. It is a number assigned by the Federal Trade Commission in order for the IRS to track revenue earned and taxes paid on that revenue
b. It is a business identification number assigned by the IRS to identify tax accounts of employers
c. It is a federally required identification number assigned by the IRS for purposes of tracking the federal taxes on business earnings.
11
Q
Balance Sheet
A
Assets, Liabilities and owner’s Equity are found on;
a. Cash Flow Statement
b. Balance Sheet
c. Income Statement
12
Q
Income Statement (aka P&L)
A
Which financial report shows information such as revenue minus expenses and the net income?
a. Cash Flow Statement
b. Balance Sheet
c. Income Statement
13
Q
Cash Flow Statement
A
Which financial report illustrates the cash that has been generated minus the cash that has flowed out of the business, and displays the total cash at the end of the year?
a. Cash Flow Statement
b. Balance Sheet
c. Income Statement
14
Q
3%
A
AR that are over ____% need intervention to get the entire team to follow an AR policy.
a. 2%
b. 3%
c. 4%
d. 5%
15
Q
The Fair Debt Collections Practices Act
A
Which Act prohibits placing “delinquent account” stickers on the outside of an envelope when mailing statements to clients?
a. The Fair Debt Collections Practices Act
b. The Consumer Protection Act
c. The Consumer Confidentiality Act
16
Q
b. How many times the accounts receivable balance is converted into cash
c. The ratio shows how efficient a company is at collecting its credit sales from customers
A
What does the account reeivable turnover calculation tell us (multiple choice)?
a. The fiscal health of the practice as it relates to accounts receivable as a percentage of gross revenue.
b. How many times the accounts receivable balance is converted into cash
c. The ratio shows how efficient a company is at collecting it’s credit sales from customers`
17
Q
Chart of Accounts
It is recommended that practices include on the chart of accounts only those they will use in the normal course of business.
A
systematic listing of all account names and numbers used by a company.
18
Q
Profit and Loss Statement
also known as Income statement
A
This is the core financial report, which covers a specific period of time and reports revenue minus expenses to show the net income during that period.
19
Q
Balance Sheet
A
A statement of the financial condition of the practice listing its assets, liabilities, and owners’ equity. It is measured at a specific point in time only.
20
Q
Cash Flow Statements
A
Financial sheet that shows where the cash in the practice comes from
21
Q
Net Income (profit)
A
This is determined when the expenses are subtracted from the income, with the obvious goal of having a positive number as the result.
22
Q
b. 10 - 20 % Net Income / Profit
A
According to the AVMA the average net income a general practice produces in a given year is ___% - ____%. Managers must maximize income and minimize expenses to achieve that goal.
a. 5 - 10%
b. 10 - 20%
c. 20 - 30%
d. 25% or greater
23
Q
Intangible Property
A
Non-Physical property that has value. Examples are: Copyrights, goodwill, and non-compete agreements
24
Q
Tangible Property
A
Physical property, such as desk, chairs, equipment, computers, and vehicles that have value
25
c. Profit and Loss Statement (Income Statement)
What is the most important financial report a manager should look at?
a. Balance Sheet
b. Cash Flow Statement
c. Profit and Loss Statement
26
Assets
This is a list of everything of value owned by the practice - Cash, accounts receivable, and equipment
27
Current Assets and Fixed / Long Term Assets
What are the two types of Assets?
28
Current Assets
items that will be consumed within a short period of time, often a year. Ie; general inventory, cash, AR
29
Fixed or Long Term Assets
items that will be consumed longer than a year and cannot easily be converted to cash. ie; building, land, equipment
30
Liabilities
These are practice debts (money owed to lenders or other parties) ie: short term such as accounts payable, ,and long term like mortgage on the practice
31
Equity
this is represented as assets minus liability. In theory; it shows the net worth of the practice.
32
Net Book Value
Equity is sometimes referred to as this
33
Cost of Goods Sold COGS
These are the products used to produce a service for the client, or products sold to clients
34
Budget
An estimate of revenues and expenses for a given period
35
Fixed Cost/expense
A cost that does not change with the variation in business. Rent, mortgage, and utility costs remain the same regardless of how busy the practice is.
36
Key Performance Indicators KPI
Statistics that can be generated from client transaction data and reviewed for performance data.
37
Owner’s equity
Owner’s interest or claim in the practice assets
38
Principal cost
initial cost of equipment when purchased
38
Transaction
A purchase that must be recorded
39
Variable cost / Expense
Any cost that varies with the volume of business for the practice. The costs of medical supplies and drugs increase or decrease depending on the volume of business
40
Accounting
The art of measuring, communicating and interpreting financial activity
41
Accrual Accounting
A system that recognizes revenues as earned and expenses as incurred.
42
Accrual basis method
A system that recognizes income when it is earned and expenses when they are incurred regardless of when the cash is received or disbursed..
43
Bank Statement
Summary of financial transactions which have occurred over a given period on a bank account
44
Benchmark
Measurable quantities for a given period of time that are considered industry standards
45
Benchmarking
The process by which a business compares itself to others
46
Capital
The rights (equity) of the owners in a business enterprise
47
Capital Asset
Property of any kind held by an assessee, whether connected with their business or profession or not connected with their business or profession. It includes all kinds of property, movable or immovable, tangible or intangible, fixed or circulating.
48
Cash Accounting
A system that recognizes income only when cash is collected from a sale, and recognizes expenses when cash is actually paid for goods and services received.
49
Cash basis
A system that recognizes income when it is received and expenses when they are paid, rather than when the income was earned or expenses was acquired.
50
Cash Budget
An estimate of cash receipts and disbursements for a specific period of time. Used to determine whether a business has enough money to maintain standard operations. Also helps determine if cash money is being used in unproductive capacities.
51
Certified Public Accountant CPA
Accounting professional who has attained certification by passing a comprehensive exam, and maintained with continuous professional education, and subscribing to a heightened level of business ethics.
52
Chartered Accountant CA
Professional has tested and been determined to have the qualifications to audit financial statements and business practices, as well as offer advisory services to clientele.
53
Checks and Balances
Procedures set in place to reduce mistakes of improper behavior
54
Commission Pay Garnishments
Any legal or equitable procedure through which some portion of an employee’s earnings is required to be withheld by an employer for the payment of commission based pay on services or products that have not been collected.
55
Consumer Price Index CPI
An index of prices used to measure the change in the cost of basic goods and services in comparison with a fixed base period.
56
Cost of Living COL
Theoretical price index that measures relative cost of living over time or regions. It is an index that measures differences in the price of goods and services, and allows for substitutions with other items as prices vary.
57
Debt
A duty or obligation to pay money, deliver goods, or render services under an express or implied agreement
58
Depreciation
Systematic allocation of the cost of tangible assets over the time period for which it provides benefit.
59
Differential Pay
A compensating differential, which is also called compensating wage differential or an equalizing difference, and is defined as the additional amount of income that a given employee must be offered in order to motivate them to accept a given undesirable job.
60
Dunning Letters
A notification sent to a customer, stating that the customer is overdue in paying an account receivable to the sender.
61
Embezzlement
The fraudulent appropriation of funds or property entrusted to your care, but actually owned by someone else.
62
Expenses
Measured outflow of services and or goods, matched to the revenue generated for the outflow
63
Experience Rating
A system used by insurance companies in the US to set the premium to be paid by the insured on the basis of risk to the company providing the insurance.
64
Flexible / Variable Expense
Costs that may be manipulated in amount, or eliminated by not engaging in the activity that incurred in the expense.
65
General Ledger
The collection of all Assets, Liabilities, Equity, Revenue and expense accounts from which the financial statements are derived.
66
Generally Accepted Accounting Principles GAAP
A framework of accounting standards, rules and procedures defined by the professional accounting industry, which has been adopted by nearly all publicly traded US Corporations
67
Gross Domestic Product GDP
The total value of goods produced and services provided in a country during one year.
68
Historical Data
Past periods data, usually used as a basis for forecasting future trends
69
Imprest Account
A fund or cash reserve that is maintained at a constant level for lengthy periods of time.
70
Income
A gain or recurrent benefit, usually measured in money.
71
Income Tax
Tax levied by a government directly on income, especially an annual tax on personal income.
72
Incorporated
Formed into a legal corporation.
73
Inflation Rate
The percentage rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling.
74
Interest Rate
Typically noted on an annual basis, known as the annual percentage rate (APR)
75
Internal Auditing Controls
Processes in place to provide management reasonable assurance that no practice resources are being lost, that financial reporting is reasonably accurate, and that profitability targets are achieved.
76
Leasehold Improvements
Enhancements paid for by a tenant to leased space
77
Limited Liabilities Company LLC
A corporate structure whereby the members of the company are not personally liable for the company’s debts or liabilities
78
Liquid Assets
Assets that can be converted into cash quickly and with minimal impact to the price received
79
No-Lo Practice
A veterinary practice with little, to no, profitability
80
Operating Expenses
The expenses of a business not directly associated with the making of a product, or providing a service, such as administrative, technical or selling expenses.
81
Paid Time Off PTO
An employee benefit that provides a bank of hours in which the employer pools sick days, vacation and personal days allowing employees to use as they need or desire.
82
Operating Income
Revenues or income resulting from vet activities and vet related sales, such as pharmacy sales. Does not include non-vet related income such as interest income.
83
Payroll Tax
Imposed on employers or employees, and are usually calculated as a percentage of the salaries that employers pay their staff.
84
Practice Management Software PMS
A category of healthcare software that deals with the day to day operations of a vet practice.
85
Production Pay
Productivity-based pay rewards employees based on measurements of the quantity of work and outputs.
86
Profit
A financial gain, especially the difference between the amount earned and the amount spent in buying, operating, or producing something
87
Pro-Forma Budget
A projection or estimate of what may result in the future, given current assumptions and predictions
88
Rent
A tenant’s regular payment to a landlord for the use of property or land
89
Return on investment ROI
A measure of profitability used to refer to a single project and expressed as a ratio. Formula = revenue generated divided by the cost of assets consumed for the project
Better explained as income that an investment generates compared with the cost of the investment. It is a measure of how effectively a firm uses its assets to generate profit. 
90
Revenue
All sales of the practice for goods and services
91
Salary Compression
When employees in lower-level jobs are paid almost as much as their colleagues in higher-level jobs, including managerial positions.
92
Sales Tax
A tax on sales or on the receipts from sales.
93
Shareholders Equity
Shareholders Equity represents the amount by which a practice is financed through common and preferred shares.
A practice’s total assets minus its total liabilities. Equivalently, it is shared capital plus retained earning minus treasury shares.
94
Statement Reconciliation
A form that allows individuals to compare their personal bank account records to the bank’s records of the individual’s account balance in order to uncover any possible discrepancies
95
Succession Planning
Succession planning increases the availability of experienced and capable employees that are prepared to assume these roles.
A process for identifying and developing new leaders who can replace old leaders when they leave, retire or die.
96
Unemployment Taxes
Taxes paid by employers into a federal or state fund to pay benefits to employees who are terminated.
97
Use Tax
A sales tax on purchases made outside one’s state of residence on taxable items that will be used, stored or consumed in one’s state of residence and on which no tax was collected in the state of purchase.
98
Straight-line depreciation
the cost of the asset is recognized evenly over its useful life.
99
Modified Accelerated Cost Recovery System (MACRS)
an accelerated depreciation method required by the US income tax code. The depreciation is accelerated so that more of the cost is recognized in the first several years, and less near the end, of the asset’s useful life.
100
Variance Analysis
identifies the variance of a financial metric and may help explain why. Example; wage expenses that are significantly over budget will prompt investigation.
101
A. Cash Based Accounting
Most practices use this method of accounting
a. cash based accounting
b. accrual based accounting
c. open book accounting
102
a. cash based accounting
This method of accounting Recognizes revenue when cash is RECEIVED and recognizes expenses when they are PAID. This method allows for a more clear vision of day to day operations.
a. cash based accounting
b. accrual based accounting
c. open book accounting
103
b. accrual based accounting
This method of accounting recognizes revenue when it is EARNED and expenses when they are INCURRED. When goods are used and services are performed.
a. cash based accounting
b. accrual based accounting
c. open book accounting
104
b. Accrual based accounting
This method of accounting is considered more accurate
a. cash based accounting
b. accrual based accounting
c. open book accounting
105
c. Monthly
How often should a thorough review of the financial statements be performed
a. daily
b. weekly
c. Monthly
d. quarterly
e. annually
106
All of the above
Which of the following relate to the purpose of Financial Statements
a. to enable ownership and management to properly review what has happened in the period being measured.
b. Thorough review of the financial statements should be part of the monthly routine of the owner and manager of the practice as well as Key employees and department heads
c. Statements may be segmented by department, for example a separate income statement exclusively for boarding to isolate that department as a “stand-alone” profit center
d. to understand the past performance of the practice, and use past performance as a basis for future trends.
107
5. Reporting
Which one of these is NOT one of the 4 major areas of understanding Financial Statements
1. Theories
2. Purpose
3. Practicality
4. Effect
5. Reporting
107
b. Net Income
Income from vet services and sales, less the cost of goods and services, results in gross profit. When the additional operating expenses are subtracted from gross profit, the result is _____?
a. Net Expenses
b. Net Income
c. Fixed Income
d. Variable Income
108
True
True / False
It is important that the P&L sheet is as detailed as possible to aid in determining where inconsistencies may lie by comparing benchmarks
109
False
Stating expenses as a percentage of revenue is an extremely valuable tool to insure accurate interpretation and comparison to historical performance. Percentages will give a more accurate picture than dollar amounts.
True / False
Stating expenses as a dollar amount of revenue is an extremely valuable tool to insure accurate interpretation and comparison to historical performance. Dollar amounts will give a more accurate picture than percentages.
110
b. Fixed Expenses
in general they are a set of costs to the hospital and do not fluctuate with how busy the practice may or may not be, are called:
a. Variable Expenses
b. Fixed Expenses
c. Staff Payroll Expense
d. Active Expense
111
b. Fixed Expense
Rent, most utilities, medical ins and similar expenses that will still be relatively the same no matter the revenue are known as...
a. Variable Expenses
b. Fixed Expenses
c. Staff Payroll Expense
d. Active Expense
112
b. Fixed Expense
If doctors are paid on salary they are a
a. Variable Expenses
b. Fixed Expenses
c. Staff Payroll Expense
d. Active Expense
113
a. Variable Expense
this type of expense will change with the amount of business produced by the practice.
a. Variable Expenses
b. Fixed Expenses
c. Staff Payroll Expense
d. Active Expense
114
b. Utilities
e. Property Tax
Which of the following would NOT be considered a variable expense?
a. COGS
b. Utilities
c. Staff Payroll
d. DVM Wages if on production
e. Property Tax
115
c. COGS
the largest sector of expenses managers can affect is
a. staff payroll
b. COGS
c. Health Insurance
d. Utilities
115
False
The balance sheet summarizes assets, liabilities, and equities of the practice at the time of the statement and offers no historical figures
True / False
The balance sheet is a good reference when comparing one period to the next.
116
c. Balance Sheet
What is also known as the Statement of Financial Condition of the Practice
a. Income Statement
b. Cash Flow Statement
c. Balance Sheet
117
b. 5-10 days
Reports should be generated within __ - __ days after the ended of the month
a. 1-3
b. 5-10
c. 10-15
118
Return on capital analysis
this amount is derived by; income / average total assets =
119
Earnings Before Income, Taxes, Depreciation, and Amortization
What does EBITDA stand for?
120
Common KPIs include all of the following except;
a. Total revenue and total transaction by month
b. Average transaction charge by month
c. New client and lost clients by month
d. Revenue, transactions, and average transaction charge per DVM per month
e. Revenue by category (vx, lab, etc)
f. Accounts receivable by again classification (30,60,90 days)
g. Staff expenses as percentage of gross income
h. staff turnover rate
121
Net Profit Margin = practice profit / practice revenue.
What equation Measures simple profit of the practice
122
Net Profit Margin
This Measures simple profit of the practice. A higher value indicates more revenue that falls to the bottom line instead of being consumed by expenses
122
GROSS PROFIT MARGIN
Measures how much profit is in a product or service
123
GROSS PROFIT / REVENUE
What is the equation to calculate Gross Profit Margin?
124
Practice revenue / practice transactions
What is the equation to calculate Average Transaction Charge
125
Practice revenue / full time DVMs
What is the formula for calculating Revenue per full time DVM?
126
credit Sales / Average Accounts receivable.
What is the formula for calculating Accounts Receivable Turn-Over?
127
After Tax
Relating to income that remains after the deduction of taxes are due
128
Bonus
Money or an equivalent given in addition to an employee’s usual compensation
129
Deductions
Business expenses or losses that are legally permitted to be subtracted from the gross revenue from a business when computing its taxable income.
130
Direct Deposit -
The electronic transfer of a payment directly from the account of the payer to the recipient’s account
131
Electronic Funds Transfer EFT
The process of moving transactions funds from one bank to another via the Automated Clearing House of Federal Reserve Network
132
Exempt Worker
An employee who is exempt from minimum wage and OT requirements of the Fair Labor Standards Act FLSA.
133
Federal Income Tax
A tax levied by the US Internal Revenue Service on the annual earnings of individuals, corporations, trusts and other legal entities.
134
Hourly Compensation
pay that must include overtime pay for all time worked in excess of 40 hours per week
135
Salary Compensation
pay that is exempt from the overtime laws
136
Non-Exempt Worker
A worker or employee who is not exempt from the minimum wage and OT requirements of the FLSA Fair Labors Standards Act
137
Overtime
Hours worked in excess of the maximum regular number of hours fixed by a statute, union contract, or custom
138
Payroll System
A system that calculates the amount you owe your employees based on factors such as the time they worked, their hourly wages or salaries, and whether they took vacation or holiday time during the pay period.
139
Payroll Tax
Imposed on employers or employees, and are usually calculated as a percentage of the salaries that employers pay their staff
140
Pre-Tax
Considered or calculated before the deduction of taxes
141
Pro-Sal
A compensation structure for associates which combines a guaranteed salary base with a percentage of an associate’s production
142
Reimbursement -
The act of compensating someone for an expense
143
Time Clock System
Methods for collecting employee hours worked during the pay period
144
Time off accrual
Benefits’ coverage earned by an employee, usually based on years of service with an employer. Accrued benefits may include Vacation, sick or personal time off.
145
Unemployment Insurance
A source of income for workers who have lost their jobs through no fault of their own
146
Unemployment Taxes
Taxes paid by employers into a federal or state fund to pay benefits to employees who are terminated.
147
W-4
A form completed by an employee to indicate his or her tax withholding preferences to the employer
148
Wages
A fixed regular payment, typically paid on a daily or weekly basis, made by an employer to an employee
149
Manual Payroll
Automated in-house processing
Third Party Payroll sevices
What are the 3 ways to process payroll?
150
Manual Payroll
Which Payroll method are Employers always liable for payroll errors and this method is the highest risk for errors?
a. Manual Payroll
b. Automated in-house processing
c. Third party payroll services
151
Weekly
Bi-Weekly
Semi-Monthly
Shift Differential
What are the 4 different payroll periods?
152
Shift Differential
a wage premium used in 24 hour facilities to make the less desirable shifts more rewarding.
153
24 pay periods
How many pay periods are in a year when using the Semi-Monthly Payroll method?
154
a. exempt employees
b. non-exempt employees
Payroll Deductions apply to:
a. exempt employees
b. non-exempt employees
c. Independent Contractors
d. all the above
e. none of the above
155
Federal Insurance Contribution Act
What does FICA stand for?
156
b. Social Security
d. Medicare
FICA is a tax for what two funds?
a. Unemployment
b. Social Security
c. State Tax
d. Medicare
e. Medicade
f. Local municipalities
157
Social Security 6.2%
Medicare 1.14%
How much payroll tax is withheld for FICA?
158
Both Employer and Employee
Who pays into the payroll tax FICA?
159
False.
Social Security is taxed up to a limit to a specific salary level, Medicare is not.
True / False
Both Social Security and Medicare taxes are limited to a specific salary level.
160
Federal Unemployment Tax Act
What does FUTA Stand for?
161
$7000
The first $_____ of an employee's earnings is taxed for FUTA
162
a. Employers Only
Who pays into the FUTA fund?
a. Employers
b. Employees
c. both
d. neither
163
c. Quarterly
How often is Form 941 filed for FICA
a. Every payroll
b. Monthly
c. Quarterly
d. Annually
164
d. Annually
How often is form 940 filed?
a. Every payroll
b. Monthly
c. Quarterly
d. Annually
165
January 31
What date does W2's need to be dispersed to employees by?
166
c. Form I-9
d. FMLA Documentation
Personnel records should include all of the following except:
a. date of hire
b. PTO paid vs used
c. form I-9
d. FMLA documentation
e. non-paid time off
f. tardy report
167
True
True / False
Contractors are responsible for their own payroll taxes and are paid a straight fee by the practice
168
$600
1099 Form
At the end of the year, any contractor who received more than $___ in wages from the practice must be issued a ____ form
169
False
the practice did not issue a form 1099 at the end of the year, the practice can be held responsible to pay all back taxes, interest and penalties.
True / False
If the practice did not issue a form 1099 at the end of the year for a contractor, the practice would not be held responsible and the contractor would be responsible to pay all back taxes, interest and penalties.
170
Accounts Payable AP
The amounts the practice owes to suppliers that are payable in the future
171
Accounts Receivable AR
Money that is owed to the practice by a client for products or services provided on credit.
172
Aging
A particular period of time, as distinguished from other periods
173
Aging Accounts Payable
AP reported in layers, subtotaled by the duration of time the payable has been due to the vendor (Liability Computation)
174
Aging Accounts Receivable
AR reported in layers, subtotaled by the duration of time the receivable has been outstanding and owing from the client (30 days, 30-60 days, 60-90 days, >90 days) (Asset Computation)
175
Billing fees
A charge added to a bill sent to a client to compensate the vet practice for the costs of billing when the usual practice policy requires payment at the time of service.
a. Billing Fee
b. Finance Fee
c. Interest Fee
176
Discounts
In regards to Accounts Payable, what is A reduction in price for services or products.
177
Finance Fees
Any fee representing the cost of credit, or the cost of borrowing
a. Billing Fee
b. Finance Fee
c. Interest Fee
178
General Ledger
The collection of all Assets, Liabilities, Equity, Revenue, and expense accounts from which the financial statements are derived
179
Interest Fees
The amount charged, expressed as a percentage of principal, by a lender to a borrower for the use of assets
a. Billing Fee
b. Finance Fee
c. Interest Fee
180
Net 10/30
Payment terms on an invoice. On a net 10, the net amount is due within 10 days of the date of invoice. A net 30 would be within 30 days.
181
Operating Expenses
The expenses of a business not directly associated with the making of a product, or providing a service, such as administrative, technical , or selling expenses
182
c. Pharmaceuticals
Which of these is NOT considered an operating expense?
a. Administrative / Management
b. Technical
c. Pharmaceuticals
d. Selling Expenses
183
Service Charge
An extra charge assessed for a service
184
Transaction receipt
A written record of financial transaction
185
Write-offs
A cancellation from an account of bad debt or worthless asset
186
Accounts Payables
amounts owed to your suppliers that are payable in the future.
187
Accounts Receivable AR
Monies owed to the practice for services rendered or products sold that have not been paid for at the time of the service or when the product is dispensed.
188
a. 1.5% and 3%
Practices should keep AR no higher than ___% of gross revenue, and if over ___%, an intervention should be considered.
a. 1.5% and 3%
b. 2% and 5%
c. 3% and 5%
189
d. File a police report
When a check is returned for non-sufficient funds NSF the practice has three choices; Which one is not a viable choice?
a. Accept the financial loss
b. Attempt to collect
c. Use a third party collection agency
d. File a police report
190
d. 50%
It is recommended to collect what amount of an estimate prior to beginning treatment on a patient?
a. The full amount
b. 110% in case there are add-ons
c. 75%
d. 50%
e. 30%
f. None, it is offensive to ask for money prior to treatment.
191
b. Holding check for delayed payment
defined as accepting a check dated with the the date it was accepted, but holding the check for deposit on a later date.
a. Post-dated check
b. Holding check for delayed payment
c. Goodwill payment
d. Delayed billing
192
False
There is no guarantee the funds will be available when the check is deposited
True / False
Holding a check for delayed payment guarantees the funds will be available when the check is deposited
193
True
True / False
Accepting post-dated checks (dated past the day the check is accepted) is illegal in some states
194
True
The likelihood of collection increases when the service is still fresh in the clients mind
True / False
Clients should be sent a statement immediately after services are performed.
195
False
according to the Fair Debt Collection Practices Act stickers cannot be placed on the outside envelope. However, it is ok to place an overdue sticker on the statement itself.
True / False
Clients with no payment in over 60 days should be notified of the overdue account with A handwritten note on the statement and An overdue sticker placed on the envelope
196
c. Accounts past due 90 days
When should a client be turned over to collections?
a. If no payment has been made after 30 days.
b. Accounts past due 60 days
c. Accounts past due 90 days
d. Accounts past due 120 days
e. Never use a collections agency, it's a waste of money
197
d. 7 years
How long is a clients credit affected once they have been submitted to collections
a. 90 days
b. 1 year
c. 4 years
d. 7 years
e. 10 years
f. Indefinitely
198
All of the above
What is Vital Information to provide to a Collection Agent?
a. Clients full name, address, phone numbers - cell and work
b. Total balance due on acct, including finance charges
c. Clients occupation, if known
d. Clients employment address, if known
e. Client’s driver’s license number
f. Copy of client information sheet and signature of client guaranteeing payment for services rendered
199
a. Fair Debt Collection Practices Act
What law Regulates collection procedures of past due accounts?
a. Fair Debt Collection Practices Act
b. Fair Standards in Debt Act
c. Collection Regulations Act
d. US Federal Bad Debt Act
200
False
Fair Debt Collection Practices Act was Passed to protect the public from unethical collection procedures and mainly applies to collection agencies, but these same regulations must be considered as the vet team attempts to collect outstanding accounts
True / False
The Fair Debt Collection Practices Act only applies to collection agencies
201
False
Managers must have documentation that the employee authorizes any payroll deduction
True / False
If an employee has an account balance, it is permissible to deduct the amount owed from the next paycheck without the employees consent.
202
True
True / False
Federal laws prohibit money from being withheld that would take the wages realized to lower than minimum wage.
203
c. AR Turnover Ratio
d. Days in AR Ratio
The two most common ways of analyzing AR status is
a. Beginning AR
b. Ending AR
c. AR Turnover Ratio
d. Days in AR Ratio
e. Number of clients owing in AR
204
Beginning AR + Ending AR / 2 = Average Accounts Receivable
How do you calculate Average Accounts Receivables?
a. Average over a 3 month period
b. Beginning AR + Ending AR divide by 2
c. Take the highest month of AR and the lowest month of AR and divide by 2
205
Accounts Receivable Turnover
This ratio tells you How many times the accounts receivable balance is converted into cash
206
Credit Sales / Average Accounts Receivable
What is the formula for Accounts Receivable Turnover?
a. Credit Sales / Average Accounts Receivable
b. Average Accounts Receivable x 12 then divided by 30
c. Credit Sales / Current Accounts receivable
207
Higher
A higher or lower value for the AR turnover ratio is better because it indicates the AR balance is turned into cash more often
208
Days in Accounts Receivable
This indicates how many days a clients account sits in AR before being collected.
209
b. Number of Days in Period / AR Turnover = Days in AR
How do you calculate Days in Accounts Receivable
a. Credit Sales / Average Accounts Receivable
b. Number of Days in Period / AR Turnover
c. AR Turnover x days in that particular period
d. Total months AR x 0.12
210
c. Every 30 days
Divide 365 days by 12 to get 30.42
This means AR turns over every 30 days
If AR Turnover equals 12 for the year, What is the Average Days in AR?
a. 144 days
b. 14.4 days
c. 30 days
d. 27 days
211
Amortization
Periodic expense attributed to the decline in usefulness of intangible assets over its estimated useful life.
212
Asset Control -
A trust which can be used to maintain control over the trust assets for a designated period of time, which may survive death
213
Capital Acquisitions
One entity acquiring control of another entity
214
Cash Budget
An estimate of cash receipts and disbursements for a specific period of time. Used to determine whether a business has enough money to maintain standard operations. Also helps determine if cash money is being used in unproductive capacities.
215
CPA Certified Public
Accounting professional who has attained certification by passing a comprehensive exam, and maintained with continuous professional education, and subscribing to a heightened level of business ethics.
216
Debt
A duty or obligation to pay money, deliver goods, or render services under an express or implied agreement
217
Expenses
Measured outflow of services and/or goods, matched to the revenue generated for the outflow
218
GAAP Generally Accepted Accounting Principles
A framework of accounting standards, rules and procedures defined by the professional accounting industry, which has been adopted by nearly all publicly traded US corporations
219
Long Range Planning
Exercise aimed at formulating a long-term plan, to meet future needs estimated usually by extrapolation of present or known needs.
220
Operating Income
Revenues or income resulting from vet activities and vet related sales, such as pharmacy sales. Does not include non-vet related income such as interest income.
221
ROI Return on Investment -
A measure of profitability used to refer to a single project and expressed as a ratio. Formula = revenue generated divided by the cost of assets consumed for the project.
222
Shareholders
An individual or institution, including a corporation, that legally owns a share of stock in a public or private corporation
223
Short-Range Planning
The process of setting smaller, intermediate milestones to achieve within closer time frames when moving towards unimportant overall goals. Typically less than one year.
224
Strategic Planning
An organization’s process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy.
225
Budgeting
a process of planning expense and revenue and measuring these values against the actual financial results, which will provide management with indications of how the operational plans are being executed.
226
Expense / Gross Revenue x 100
What is the Formula to calculate percent of gross revenue?
227
c. 7%
$87365 / 1,250,000 x 100
If Medical Supplies expenses were $87,365 and Gross Revenue was $1,250,000, what is the percent of Gross Revenue from Medical Supplies?
a. 14%
b. 10%
c. 7%
d. 4%
228
True
True / False
For a budget plan to be carried out efficiently, it is advisable to allow as many team members as possible to participate in the budgeting process within reason.
229
e. Percentage of gross revenue from each profit center
Which item is not needed to create a budget
a. Last 3 years P&L and productivity statements
b. All lease and loan documents
Fee schedule
c. List of operational changes expected in the next few years and their potential effect on revenue and/or expenses (new service, equip, construction)
d. List of major capital expenses expected in the next few years
e. Percentage of gross revenue from each profit center
f. Employee roster and recent years W-2s
230
The economic cycle AKA Business Cycle
This is predictable long term pattern changes in national income. It has an impact on consumer confidence, the labor market, and inflation, and therefore an impact on the ability of the practice to produce revenue.
231
a. Expansion, Prosperity, Contraction, Recession
Traditional business cycles undergo what four stages?
a. Expansion, Prosperity, Contraction, Recession
b. Prosperity, Expansion, Contraction, Recession
c. Growth, Decline, Growth, Decline
d. Growth, Advancement, Recession, Remodel
232
FACT Statement
FACT
What are the 6 steps to budgeting?
1. Determining the desired financial results
2. Analysis of the Financial Statement
3. Normalizing the Revenue and Expenses
4. Budgeting Revenue
5. Budgeting Expenses
6. Combining Budgeted Expense, Revenue, and Making Adjustments
233
c. 25th percentile
When setting up a budget, the first step is determining the desired financial results. For a start up practice it is recommended to use the ___ percentile of industry benchmarks
a. 10th
b. 20th
c. 25th
d. 50th
e. 75th
234
Fact Statemtent
FACT
To simplify the budget process expenses can be reorganized into four categories
1. Personnel Expenses - Payroll and taxed benefits
2. Variable Expenses/Cost of Goods Sold - Rx and Lab
3. Occupancy/Facility Expense - Rent, utilities, property taxes, maint/facility
4. Fixed/Administrative Expenses - Equipment leasing, dues, interest
235
What two ways can you normalize Revenue and Expenses?
a. Take the total revenue or expenses for the year and divide by 12
b. Remove any one-time, non-recurring items from the financials used to create the budget
c.Add the highest and lowest months revenue or expenses, Divide by 2, then multiply by 12
d. Use an average of the last three years to help normalize those nonrecurring expenses prior to using the data to create the budget
236
True
True / False
A simple method of creating an expense budget is to add the last three years average growth rate to the base expense figure.
237
Client Discounts
A reduction in price for services or products rendered to an individual
238
Collections
The act or process of collecting funds owed to the business or organization
239
Credit Policy
Clear, written guidelines that set the terms and conditions for supplying goods and services on credit, customer qualification criteria, procedure for making collections, and steps to be taken in case of customer delinquency.
240
Deposits
A sum of money placed or kept in the bank account, usually to gain interest.
241
Finance Charge
Money charged for payments that extends beyond an agreed upon time limit; the amount charged is governed by the usury laws in the State within which you practice
242
Interest Charges
The cost of borrowing money, assessed by the lender over time, usually expressed as a percentage
243
Monthly Statements
Account statement mailed or sent by electronic mail to a customer that lists debits, credits, service charges, and account adjustments during the prior month
244
Payment Options
The various methods used to collect payment from a client
245
Present Value of Money
The current monetary value of some defined investment return, given a specified rate of return
246
Third Party Lenders
Outside lending services for clients with large balances, offering the option to pay back that balance over time.
247
False
In general it is agreed among most industry experts that extending credit to clients is not recommended, especially with the many third-party options available.
True / False
In general it is agreed among most industry experts that extending credit to clients is recommended.
248
Client Credit Policy
This type of Credit Policy establishes the pre-qualifications necessary to open a charge account (deals with the client0
249
Charge Account Policy
This type of Credit Policy establishes credit limits, payment due dates, payment methods and invoicing procedures. (deals with the logistics)
250
b. Charge Account Policy
The following details should be included on the form of what Credit Policy?
Client information. Name, address, employer, phone number
Amount of unpaid balance
Credit service fees
Total amount financed
Terms of credit - day of the month payment is due. Penalty if month is not received in time
Interest rate and timing
Amount credited, agreed upon monthly payment, last payment due date
Client signature in agreement of details
a. Client Credit Policy
b. Charge Account Policy
c. Client Recurring Charge Account
d. Accounts Receivable Credit Policy
251
ATC Average Transaction
Total revenue of a time period divided by the total number of transactions in that period
252
Benchmarking
The process by which a business compares itself to others
253
Break even analysis
An analysis that is used to determine when your business will be able to cover all of its expenses and begin to make a profit
254
Fixed Costs
Expenses that have to be paid by a company, independent of any business activity
255
Margins
Revenue less expenses. Also known as profit margin
256
Perceived Value
The consumer’s perceived value of a good or service affects the price that he or she is willing to pay for it.
The worth that a product or service has in the mind of the consumer.
257
Profit Centers
A section of the practice that can be assessed in terms of its revenues and expenses
258
Semi-Variable Costs
Expenses which contain both a fixed cost component and a variable cost component. The fixed cost element is part of the cost that needs to be paid irrespective of the level of activity achieved by the entity.
259
Variable Costs
Expenses that increase or decrease as a dollar amount in direct relation to the volume of practice activity,
260
Volume
Example; High volume or low volume practice regarding length and number of appointments.
The quantity or number of goods sold or services sold in the normal operations of a company in a specified period.
261
d. Annually
At a minimum, How often should a practice review the fee schedule?
a. Monthly
b. Quarterly
c. Semi-Annually
d. Annually
262
True
True / False
Using the Consumer Price Index can help in determining the fee schedule.
263
$1.67 per minute
10 hours x 60 minutes = 600 min
5 days x 600 min = 3000 min
4 weeks x 3000 min = 12,00 minutes the clinic able to produce income per month.
$20,000 monthly expenses / 12,000 minutes = $1.67 per minute
Calculate Fixed Cost Per Minute:
-Practice is open 10 hours per day, 5 days a week
-Monthly Fixed Costs are $20,000
264
[(Fixed costs per minute + Staff costs per minute) x {(Length of procedure in staff minutes)] + (DVM costs per minute) x (length of procedure in DVM minutes)] + (direct costs x 2) + Profit = Cost of service.
What is the formula for calculating the cost of a service?
265
All non DVM staff costs divided by the billable minutes the practice is open x number of non DVM staff to complete the procedure. Then multiply by the number of staff it takes to complete the procedure.
What is the formula for calculating Staff Cost Per Minute
266
$1.42 per staff per minute cost
$17,000 / 12,000 minutes
Calculate the Cost per staff per minute using the following information:
-Staff costs per month is $17,000
- Practice is open 12,000 minutes per month
267
$19.88 staff cost
($17,000 / 12,000) x 2 (x7)
Determine the staff cost of a procedure that takes 2 staff members 7 minutes to perform if:
-Staff costs per month is $17,000
- Practice is open 12,000 minutes per month
268
All DVM costs are divided by the billable minutes the practice is open.
What is the formula for calculating DVM Costs per minute?
269
$0.59 per minute per DVM cost
$7102 / 12,000
Calculate the DVM cost with the following information:
- DVM Costs are $7102 per month
- Practice is open 12,000 minutes per month (billable minutes)
270
Double the cost
How do you calculate the direct cost of a supply or good
271
$46.52
Fixed costs per minute + Staff costs per minute x length of procedure
$1.67 + $1.42 x 10 minutes = $30.90
DVM cost per minute x length of procedure
$0.59 x 5 = $2.95
Direct costs x 2
$2.46 x 2 = $4.92
Profit 20%
$30.90 + 2.95 + $4.94 = $38.77 (total practice cost)
$38.77 x 20% = $7.75 (Profit in $$)
$38.77 + $7.75 = $46.52 (cost to client)
Calculate how much to charge for a procedure using the following information:
- Procedure takes 10 minutes of staff time and 5 minutes of DVM time
- Staff cost per minute $1.42
- DVM Cost per minute $0.59
- Fixed Costs per minute $1.67
- Cost of supplies used in procedure $2.46
- Desired Profit 20%
272
Audit Trails
A record of financial transactions from which an accountant can reconstruct the sequence of events
273
Day End Procedures
A fixed, step-by-step sequence of activities or course of action (with definite start and end points) that must be followed in the same order to correctly perform a task
274
Fraud
An act or course of deception; an intentional concealment of the truth to gain unlawful or unfair advantage.
275
Internal Control
All measures, systems and protocols used by a business to prevent errors, waste, and fraud; to ensure the reliability of accounting data, and promote policy compliance.
276
Petty Cash
A small fund of cash maintained for incidental expenditures
277
Timely Deposits
Deposits should be made as often as possible, preferably daily. Failing to make timely deposits increases the risk of error and the risk of misappropriation of funds.
278
c. 5%
More than ___% of gross revenue is lost to embezzlement in small business annually.
a. 1%
b. 3%
c. 5%
d. 7%
e. 9%
279
a. Insurance company
c. Practice Accountant
d. Practice Attorney
e. Police
Who is a good resource if you suspect embezzlement in your practice?
a. Insurance company
b. Online forums such as VHMA
c. Practice Accountant
d. Practice Attorney
e. Police
f. Practice Bank
280
Chart of Accounts
A systematic listing of all account names and numbers used by a company
281
Chart of Accounts
a list of created numbered categories used to define each class of items for which money is spent or received.
282
Journal
A bookkeeping term that describes the document in which business transactions are originally recorded as they occur. The book of entry prior to the Ledger.
283
Receipts
A written acknowledgement that something of value has been transferred from one party to another
284
Reconcile
An accounting process used to compare two sets of records to ensure the figures are in agreement and are accurate. It is the key process used to determine whether the money leaving an account matches the amount spent.
285
Imprest Petty Cash
a cash fund maintained for small purchases
286
b. Audited
Regarding financial statements which is more detailed and provides the greatest level of assurance?
a. Compiled
b. Audited.
c. Reviewed
287
a. A system of calculating this year’s projected tax based off of last year’s tax
As it relates to tax planning, what is Safe Harbor?
a. A system of calculating this year’s projected tax based off of last year’s tax.
b. A system created by the IRS that will hold businesses harmless for low level tax miscalculation.
c. Safe Harbor refers to retirement vesting schedules and income tax deferral.
288
Fixed
Are wages for doctors who are paid on a salary basis considered a fixed or variable expense?
289
COGS
The products used to produce a service for the client, or products sold to clients.
290
Accrual
This type of accounting recognizes revenue when it is earned and expenses when they are incurred. When goods are received and services are performed. Is this Cash-based or Accrual-based?
291
Accrual
Which type of accounting is typically considered more accurate?
292
Income Statement
What is another name for the Profit and Loss Statement?
293
A percentage of Gross
When comparing expenses on the Profit and Loss Statement it is important to express expenses in dollar amounts but also as ___________________.
294
b. Liability + Owner Equity
The basic accounting equation is Assets = __________ + _________.
a. Income + Expenses
b. Liability + Owner Equity
c. Gross income + Net Income
d. Equity + Expenses
295
Federal Insurance Contribution Act
What does FICA stand for?
296
a. Employer
b. Employee
Who pays FICA taxes?
a. Employer
b. Employee
c. The client
d. both a and b
e. none of the above
297
Social Security and Medicare
What does FICA fund?
298
$600
At the end of the year, any independent contractor who received more than $______ in wages from the practice must be issued a 1099 form.
299
b. Fair Debt Collection Practices Act.
Which act regulates collection procedures of past due accounts?
a. Right to Funds Act
b. Fair Debt Collection Practices Act.
c. IRS
d. Debtors Recognizance Act
300
A higher value for the accounts receivable turnover ratio is better because it indicates the AR balance is turned into cash more often.
Regarding the value of the accounts receivable turn-over; is it better to have a higher or lower number
301
c. Profit and Loss Statement
Which financial statement is considered the most important for small business?
a. Cash Flow Statement
b. Balance Sheet
c. Profit and Loss Statement
302
Variable
Is staff payroll considered a fixed or variable expense?
303
b. Federal Unemployment Tax Act (FUTA)
Which payroll tax is paid by employers only and only on the first $7,000 of an employee’s earnings?
a. State Unemployment Tax Act (SUTA)
b. Federal Unemployment Tax Act (FUTA)
c. Workers Compensation Tax.
304
b. It is a business identification number assigned by the IRS to identify tax accounts of employers.
What is an Employer Identification Number (EIN)?
a. It is a number assigned by the Federal Trade Commission in order for the IRS to track revenue earned and taxes paid on that revenue.
b. It is a business identification number assigned by the IRS to identify tax accounts of employers.
c. It is a federally required identification number assigned by the IRS for purposes of tracking the federal taxes on business earnings.
305
b. 3%
AR that are over ______% need intervention to get the entire team to follow an AR policy.
a. 2%
b. 3%
c. 4%
d. 5%
306
a. The Fair Debt Collections Practices Act
Which Act prohibits placing “delinquent account” stickers on the outside of an envelope when mailing statements to clients?
a. The Fair Debt Collections Practices Act
b. The Consumer Protection Act
c. The Consumer Confidentiality Act
307
b. How many times the accounts receivable balance is converted into cash.
c. The ratio shows how efficient a company is at collecting its credit sales from customers.
What does the accounts receivable turnover calculation tell us (Multiple Choice)?
a. The fiscal health of the practice as it relates to accounts receivable as a percentage of gross revenue.
b. How many times the accounts receivable balance is converted into cash.
c. The ratio shows how efficient a company is at collecting its credit sales from customers.
308
6.9%
What is the percent of gross if the gross revue is $1,250,000.00 and the expense is $87,365.00?
309
6. Combining budgeted revenue and expense and making adjustments
What is the final (or sixth) stage of budgeting
1. Determining the desired financial results.
2. Analysis of the financial statements
3. Normalizing the revenue and expenses
4. Budgeting revenue
5. Budgeting expenses
6. Combining budgeted revenue and expense and making adjustments
310
b. Patient Volume
______________ is considered a Key Driver of revenue growth.
a. Client Compliance
b. Patient Volume
c. Employee performance
d. Leadership
311
c. 3 years
A simple method of creating an expense budget is to add the last ___ years average growth rate to the base expense figure?
a. 1 year
b. 2 years
c. 3 years
d. 4 years
312
b. Client Credit Policy
A policy that establishes the pre-qualifications necessary to open a charge account. Example; a client may need a minimum of 2 years of perfect payment history without a problem.
a. Charge Account Policy
b. Client Credit Policy
c. Client Charge Policy
d. Client Account Policy
313
a. Charge Account Policy
A type of policy that establishes credit limits, payment due dates, payment methods and invoicing procedures.
a. Charge Account Policy
b. Client Credit Policy
c. Client Charge Policy
d. Client Account Policy
314
e. >5%
What percent of gross revenue is said to be lost to embezzlement in small businesses annually?
a. 1-2%
b. 2-3%
c. 3-4%
d. 4-5%
e. >5%
315
b. The business cycle.
Expansion, prosperity, contraction, and recession are the four stages of;
a. The budget process.
b. The business cycle.
c. Exit strategy awareness.
d. Business valuation timing.
316
a. Remove any non-recurring items from the previous year.
b. Combine the last 3 years as an average.
What are two ways of normalizing revenue and expenses when creating a budget (Multiple Choice)?
a. Remove any non-recurring items from the previous year.
b. Combine the last 3 years as an average.
c. Combine annual budget totals and divide by 12 to normalize anticipated monthly expenses.
317
All of the above
Which metrics below are important considerations when creating a budget (Multiple choice)?
a. Last three years Profit and Loss and Productivity Statements.
b. All lease and loan documents.
c. Fee schedule.
d. List of operational changes expected in the next few years and their potential effect on revenue and/or expenses (new services, expansion, etc.).
e. List of major capital
318
a. Client Credit Policy
c. Charge Account Policy
In regards to creating a Credit Policy; what are the two sub policies that you should begin with (Multiple Choice)?
a. Client Credit Policy
b. Client Charge Policy
c. Charge Account Policy
319
a. The pre-qualification procedures for a client of unknown standing.
b. The process for flagging a pre-qualified client in your practice management system.
d. Total invoice amount a client can charge without additional approval of management/ownership.
What elements should be included in the Charge Account Policy for the practice (Multiple Choice)?
a. The pre-qualification procedures for a client of unknown standing.
b. The process for flagging a pre-qualified client in your practice management system.
c. Acceptable forms of payment as well as storage of credit card numbers to be used as a backup guarantee the client agrees to at signing.
d. Total invoice amount a client can charge without additional approval of management/ownership.
320
False
True / False
A list of procedures to use when considering ways of extending credit to clients includes creating ranges of available credit amounts based on the clients longevity with the practice.
321
B. A list or index of prices used to measure the change in the cost of basic goods and services. 
What is the Consumer Price Index?
a. A list or index of prices used to measure the change in the cost of basic goods and services.
b. An index report of goods and services used to track consumer spending trends for purposes of determining price points in business.
c. An index of consumable goods created by the Bureau of Labor Statistics that helps establish economic trends in business.
322
True
True / False
The Consumer Price Index can be instrumental in determining the cost of living increase for a variety of expenses associated with running a veterinary practice.
323
b. Staff cost per minute.
c. Veterinary cost per minute.
d. Fixed cost per minute.
In relation to Fee Analysis; which of the following elements should be included in the calculation (Multiple Choice)?
a. Variable cost per minute.
b. Staff cost per minute.
c. Veterinary cost per minute.
d. Fixed cost per minute.
324
b. 67.8%
Marsha Heinke DVM states _____% of practices have been victims of fraud or embezzlement.
a. 80%
b. 67.8%
c. 49.8%
325
False
No matter the dollar amount, you should prosecute
True / False
It is recommended that practices do not prosecute confirmed cases of embezzlement unless the loss is determined to be greater than $2,000.
326
b. Your Insurance Carrier.
What entity may be a good resource for the practice in the event embezzlement is suspected?
a. The Federal Trade Commission.
b. Your Insurance Carrier.
c. Business Protection Agency
d. All the above.
327
a. Passive Income
Active income is described as that income generated directly by the vet. Passive Income is that which can be generated by a vet practice without the direct involvement of the vet.
Radiography, Dentistry and Laboratory diagnostics are all examples of:
a. Active Income
b. passive income
328
Gross Profit Margin
The difference between the cost of a product and the revenue it generates is called what?
329
13%
If your end of year revenue for the practice was $2,400,000 and your profit was $312,000 what is your net profit margin percent?
330
Direct Expenses because they relate directly to specific income production
Whenever a vet assumes custody of a client's animal, a bailment takes place.
331
Current Liabilities
An organizations debts or other obligations which must be discharged within a short time (usually within the earnings cycle, or one year) are called what?
332
14.6 days. As a general rule, it is good business practice to keep 20-30 days worth of cash on hand to ensure liquidity issues do not arise
(assuming clinic is open 5 days a week, 52 weeks a year)
If the practice currently has $94,250 of cash on hand and the annual operating expenses of the practice are $1,677,000, how many days cash balance do you have and is that a healthy number for the practice?
333
Veterinary Salaries
Management Salaries
Perquisite income
Profits reflected as return on owner's investment in the practice
Equitable distribution of remaining profits among owners
What are the 5 tiers of practice owner(s) compensation?
334
Expenses are 80% of revenue, leaving 20% profit for the owner.
Preferable benchmark is 20-30% profit.
If your practice had $3,691,000 in revenue and $2,952,800 in expenses, how would you express the expenses using common sizing?
And is this within the preferred benchmarks?
335
$15,036.62
$22,968.75 + $7104.50 / 2
Accounts receivable on Jan 1, 2020 was $22,968.75
Accounts receivable on Dec 31 2020 was $7104.50.
What is the average Accounts receivables?
336
2.9 Turnover
Credit sales / Avg AR
$43,426.98 / $15,036.62 = 2.9
Sales for the year =
$43,426.98 in credit extended
$191,207.42 in Cash
$273,961.80 in Checks
$642,044.50 in Credit Cards
$15,036.62 average Accounts Receivables
What is the Accounts Receivable Turnover?
337
b. Pharmacy
Which of the elements below are NOT considered a forgotten cost of doing business?
a. Staff turn-over
b. Pharmacy
c. Continuing Education
d. Credit card merchant fees
338
a. Client Credit Policy
key words - Pre-qualification criteria, particular clients
A policy that establishes the pre-qualification criteria by which a particular client is permitted to open an account
a. Client Credit Policy
b. Charge Account Policy
339
b. Charge Account Policy
applies to ALL clients with a credit policy
A policy that establishes credit limits, payment due dates, payment methods and invoicing procedures.
a. Client Credit Policy
b. Charge Account Policy
340
Form 940
Annually
What form is filed under FUTA?
and How often?
341
Form 941
Quarterly
What for is filed for FICA contributions?
How often?
