Financial Management Terminology

Question 1

Examples of debit

Answer 1

• Liabilities
• Expenses
• Costs

Question 2

Examples of credit

Answer 2

• Income
• Revenue
• Equity & assets

Question 3

Define debit

Answer 3

• Money going out that which is owed or amount that was paid from your account

Question 4

Define credit

Answer 4

• Money coming in that which is credited into your account

Question 5

Describe assests

Answer 5

• Business: property, goods, equipment, buildings, land, investments & retained earnings
• Individuals: personal cash savings, interest on savings & investments

Question 6

Define liabilities

Answer 6

• The money that the business owes to others & must continue to pay

Question 7

Define capital equipment

Answer 7

• Major purchase above an agreed upon dollar amount

Question 8

Define supplies

Answer 8

• Minor purchases used for the day-t-day operations

Question 9

Examples of indirect costs

Answer 9

• Rent
• Utilities
• Cleaning Services

Question 10

Examples of direct costs

Answer 10

• Salaries
• Benefits
• Supplies
• Taxes

Question 11

Define fixed costs

Answer 11

• Same regardless of patient volumes

Question 12

Define variable costs

Answer 12

• Change with change in patient volumes

Question 13

Define cost per visit

Answer 13

• The average total costs for a single visit of a single patient
• the average overall cost for the business to see one patient one time

Question 14

Define revenue per visit

Answer 14

• The average income or reimbursement per a single visit of a single patient

Question 15

Define margin

Answer 15

• The amount of net income generated by the business after all bills are paid
• Can be percentage or dollar amount

Question 16

Define gross income

Answer 16

• Total amount of income for a month for year that comes IN

Question 17

Define net income

Answer 17

• What’s left when you subtract the total costs
• Net income = gross income - total costs