Financial Management Flashcards
A statement summarizing the record of transactions in the form of credits, debits, accruals, and adjustments that have occurred and have an effect on an asset, equity, liability, or past, present, or future revenue.
Account
an account at the end of a reporting period. This applies for all types of accounts. A bank account balance shows the amount owed to you by the bank whereas a credit card balance shows the amount you owe to the credit card company.
Account balance
A specific period of time in which the activities of a company are summarized, usually a year.
Accounting period
Money owed by a company to those with which it does business. It is also an accounting entry that represents an entity’s obligation to pay cash to its creditors. The accounts payable entry is found on a balance sheet under the heading current liabilities. Accounts payable are often referred to as payables. Think of the phone company, the gas company, and the community food vendor as types of creditors. Each demands payment for goods or services rendered and must be paid accordingly. If a community doesn’t pay its bills, it is considered to be in default.
Accounts payable
Money owed by customers (residents or others) to a community in exchange for goods or services that have been delivered or used but not yet paid for. Accounts receivable usually come in the form of operating lines of credit and are usually due within a relatively short time period, ranging from a few days or weeks to a year. Most accounts receivable in assisted living are for services billed in. If you look at the balance sheet of an assisted living community, you will usually see accounts receivable recorded as an asset because they represent a legal obligation for the customer to remit cash for its debts. Accounts receivable are not limited to businesses—individuals have them as well. People get receivables from their employers on a monthly or biweekly basis in the form of a paycheck. They are legally owed this money for services (work) provided.
Accounts receivable
A current liability account that shows amount of interest accrued on a company debt even though it has not been charged with interest.
Accured interest payable
Process of paying off a liability, deferred charge, or capital expense over some period of time.
Amortization
The process of checking records and reports to make sure they are accurate.
Auditing
Property used in operation of the company, that includes cash, buildings, good will, land, and so forth.
Assets
Shows the financial position at any given point in time. This statement gives information about assets, liabilities, and equities of a community.
Balance sheet
Level of operation at which dollars received from sales just cover fixed overhead and the variable costs involved in operations.
Breakeven point
Operating road map of future financial performance. Budgets outline company and individual goals and responsibility and a measure for evaluating performance.
Budget
An index showing the order and numbering of all the accounts in a ledger.
Chart of accounts
A system designed to manage a specific operating system. A control system for managing departmental purchases might include a beginning monthly budget amount that gets translated to a monthly budget control sheet. Monthly purchase order amounts are then recorded on the sheet showing a remaining balance. As goods are received, purchases are matched to invoices to ensure that the correct goods and prices are received and that payment is made.
Control systems
Deals with the measurement and allocation of costs to be assigned to a service or a phase of a service or production.
Cost accounting
The increasing of costs (usually labor) as a result of increased resident acuity (need) without any corresponding increase in revenue as an offset.
Cost creep
Cash and its equivalents, receivable, inventories.
Current assests
Current assets divided by current liabilities; determines how financially sound the company is. The wider the margin by which current assets exceeds current liabilities, the sounder the company.
Current ratio
_______ = An accounting entry system that either decreases assets or increases liabilities.
______ =An accounting entry that results in either an increase in assets or a decrease in liabilities on a company’s balance sheet or in your bank account
Credit
Debit
System of allocating original cost of an item over the expected life of the item, which is charged off as part of the cost as an expense on each accounting period.
Depreciation
Rights to the assets. Either (1) creditors; through loans, are debts of business; (2) proprietors; through money invested by people in the company (owners equity).
Equities
Social security taxes, FOB Federal Old Age Benefits Tax.
FICA tax
Yearly accounting period used by a company. Any 12-month period chosen by the company for computing and reporting profits.
Fiscal year
These assets fairly permanent, used in the business, not bought for resale.
Fixed assets
Interest charges, rent, lease payments, debt payments.
Fixed charges
Shows revenues, expenses, and net results of a business operation for a given period.
Income statement
Goods on hand, raw material, supplies.
Inventories
Primary record of every transaction in chronological order.
Journal
Group of accounts used by a company.
Ledger
Debts, ownership by stockholders (payable), reserves, claims against company.
Liabilities
A process by which various operational scenarios are tested using a computer-based program to determine the optimal solution for an operational problem.
Modeling
Represents excess of assets over liabilities, also known as stockholder’s equity or capital.
Net worth
Compensations paid to those at managerial levels.
Salary
Terms used to help providers understand the common elements of operation. Salary and wages are paid based on time just as care is delivered in time increments. Acuity is a means of translating resident care needs into segments of time.
Time and acquity
Revenue collected in advance or prepaid revenue. Most assisted living communities collect rent in advance. This is then earned throughout the month.
Unearned revenue
A form on which a liability is recorded, in addition to information about how and when the liability is paid.
Voucher
Describe sums paid to workers on an hourly or weekly basis.
Wages
Equal to current liabilities minus current assets plus net income, depreciation, deferred taxes, and proceeds from any sale of noncurrent assets.
Working capital
