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CVPM > Financial > Flashcards

Financial Flashcards

1
Q

Accrual Accounting

A

Recognized revenues as earned and expenses are incurred, which disregards when the actual cash transaction occurs.
Income and expenses are measured when the transactions occur.

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2
Q

Define imprest

A

The amount of cash available to make change for transaction during the coming hours of business activity. Each drawer consistently starting with a given amount of cash for change.

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3
Q

Profit center report

A

Reports that track income from related service codes and expenses related to producing that income, arriving at the profit for those practice areas.

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4
Q

Managerial accounting

A

Includes both historical and estimated data that management can use to conduct daily operations, planning future acquisitions, and developing business strategies.

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5
Q

Commodity

A

An item that is considered interchangeable and whose price is a reflection of supply and demand.

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6
Q

Intangible

A

Non physical asset that provide an organization an exclusive or preferred position in the market place. Examples: copy rights, patents, trademarks, goodwill, organizational costs.

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7
Q

Variable expenses

A

Those that will change and be directly influenced by volume. Presents a large portion of total expenses. Inventory/Product costs are the 2nd highest expense after personnel. Lower than fixed expenses.

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8
Q

FTE

A

Full Time Equivalent

Ratio of total number of paid hours during a period divided by the number of working hours in that period. M-F

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9
Q

Fixed expenses

A

Those that remain stable/unchanged, regardless of volume.

Example: Rent, professional liability insurance PLIT

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10
Q

FUTA

A

Federal unemployment tax act

Payroll or employment tax paid only by an employer. Not deducted from employee.

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11
Q

ERISA

A

Employment retirement income security act

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12
Q

Define cash basis accounting

A

Income is measured when cash is received and expenses are measured with cash is spent.

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13
Q

Production report

A

Report produced by your practice management software that shows income by service code.

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14
Q

Revenue per FTE Veterinarian

A

Practice Revenue divided by FTE vets

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15
Q

Section 125 cafeteria plan

A

Allows employees to pay certain expenses before taxes are deducted from paychecks; saving on federal and state taxes.

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16
Q

Goodwill

A

An intangible asset listed on an organization’s balance sheet. Represents the value of an organizations reputable brand name, positive customer relations, patients and other non-physical assets.

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17
Q

IRR

A

Internal Rate of Return
The rate of a discount on an investment that equates the present value of the investments. Cash outflows with the present value of the investments cash inflows.

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18
Q

Embezzlement

A

The fraudulent appropriation of funds or property entrusted to your care, but actually owned by someone else.

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19
Q

Define horizontal level of income

A

Adding products of services, satellite facilities, etc.

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20
Q

Level of assurance: Define audit

A

Highest level of assurance; an independent review of the accounting records for fairness and reliability of the financial reports.

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21
Q

Definition of implied contract

A

A contract established when acceptance can be inferred from the actions of the parties, even if no express acceptance is proved.

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22
Q

Define Bookkeeping

A

The process of recording business data in a prescribed manner.

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23
Q

What is the 1099 form used for?

A

Report compensation paid to non-employee workers

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24
Q

Accounts receivable

A

A charge against a debtor, often from sales or services rendered. Not necessarily due or past due. Current asset arising from standard business operations.

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25
Q

Define accounting

A

The art of measuring, communicating, and interpreting financial activity.

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26
Q

Direct labor

A

Includes any actions that directly contribute to the delivery of patient care or customer service.

27
Q

General ledger

A

The formal accounting record containing all of an organizations financial statement accounts.

28
Q

Chart of accounts

A

A systematic list of all accounts in a general ledger, each accompanied by a reference number.

29
Q

Indirect Labor

A

Includes all work-related actions that do not directly result in patient care or customer service. This includes attending staff meetings, CE, training bookkeeping, inventory management.

30
Q

Accounts payable

A

A debt owed to a creditor often as a result of the purchase of merchandise, materials, supplies or services. An account payable is normally a current liability.

31
Q

Balance sheet

A

A financial statement that lists a firm’s assets, liabilities and owners equity at a specific point in time. No specific date.

32
Q

Feasibility study

A

Critical step in business planning process.

Outline and evaluate several alternatives for achieving business goals and identify the most financially viable method.

33
Q

Burn Rate

A

The amount of overhead expenses and other costs in excess o revenue that a firm incurs.

34
Q

Direct and indirect ratio

A

1:1

35
Q

Depreciation

A

The process of allocating the cost of an asset across the time period for which is provides benefit. Depreciation is a non-cash expense.

36
Q

Fair market value

A

Value negotiated at arms length between a willing buyer and willing seller, each acting rationally in their own self interest with knowledge of all relevant facts.

37
Q

Safety Stock

A

An inventory cushion, in excess of lead time quantity, to help prevent a stock out if the shipment is delayed or the item is placed on back order.

38
Q

Define Asset

A

Everything of value owned by a period, company, or corporation. Assets are usually classified as either tangible or intangible.
Anything the business owns.

39
Q

Define vertical level of income

A

Expanding existing services, increasing return rates, etc.

40
Q

Define horizontal level of income

A

Adding products or services, satellite facilities, etc.

41
Q

Define zero-based budgeting

A

Starting with the assumed profit level required to make the practice grow at the desired rate in the upcoming year and then looking at the current and possible income potentials.

42
Q

Define pro forma statement

A

Projected income statements and balance sheets that aid in profit-planning.

43
Q

Define ProSal Formula

A

A form of compensation where employees are guaranteed specified based salaries, but are paid a percentage of their gross income collected by their employers when this yields a higher take-home pay than they would earn from a flat salary.

44
Q

Define revenue

A

The price of goods sold and services rendered during a given period of time.

45
Q

Define cash flow statement

A

Details inflows and outflows of cash between two points in time.

46
Q

Define income statement

A

Reports values that have accumulated between two points in time; also known as the Profit and Loss Statement.

47
Q

Define Balance sheet

A

Summarizes the assets, liabilities, and owner’s equity at a particular date.

48
Q

What is the account equation formula?

A

Assets = Liability + Owner’s Equity

49
Q

Define owner’s equity

A

The interest or claim of the practice owners in the practice assets; what the practice owes its owners.

50
Q

Define liabilities

A

Present obligations resulting from past transactions that require the practice to pay money, provide goods, or perform services in the future.

51
Q

Define transaction

A

The occurrence of an event or condition that must be recorded.

52
Q

Level of assurance: Define review

A

Middle level of assurance; CPA conducts a higher level of analytic review of various accounts and transactions.

53
Q

Level of assurance: Define compilation

A

Lowest level of assurance; CPA assesses and makes adjustments to bookkeeping data and supporting documentation provided by the hospital.

54
Q

Operating Budget

A

The most common budget format encompasses a 12-month period of operations. Operating budgets typically include those items found on a profit and loss statement, but not usually items found on a balance sheet or cash-flow statement.

55
Q

MACRS

A

Modified Accelerated Cost Recovery System
The depreciation method used since 1986 for deducting the value of depreciable property other than real estate. MACRS depreciation is faster than straight-line depreciation. MACRS is less favorable than the prior ACRS system.

56
Q

ROI

A

Return on investment. A measure of profitability used to refer to a single project and expressed as a ratio; revenue generated divided by the average cost of assets consumed as part of the project.

57
Q

Net profit margin

A

Practice profit divided by practice revenue equals net profit margin

58
Q

Average transaction charge

A

Practice revenue divided by practice transactions equals average transaction charge

59
Q

Revenue per FTE veterinarian

A

Practice revenue divided by FTE veterinarians equals revenue per FTE veterinarian

60
Q

Accounts Receivable turnover

A

Credit sales divided by average accounts receivable equals average receivable turnover.

61
Q

Average accounts receivable

A

Beginning accounts receivable plus ending accounts receivable divided by two equals average A/R

62
Q

Days in accounts receivable

A

Numbers of days in period divided by accounts receivable turnover equals days in accounts receivable

63
Q

Average inventory formula

A

beginning inventory plus ending inventory divided by two

CVPM (7 decks)

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