Financial Practices Review

Question 1

accounts

Answer 1

records of financial transactions and the resulting balances during a fiscal period, usually January 1st through December 31st

Question 2

accounts payable

Answer 2

the money the practice owes (rent, utilities, medical supplies, payroll)

Question 3

accounts receivable

Answer 3

the money owed to the practice, such as patient bills

Question 4

accounts receivable ledger

Answer 4

listing by individual patient name of all monies owed to the practice

Question 5

adjustments

Answer 5

changes to the amount of money owed for reasons other than additional services or payments (fee discounts, refunds)

Question 6

age of accounts receivable (aging analysis)

Answer 6

the period between when the service is rendered and the bill is paid, usually in 30 day intervals; computerized financial programs will process statements calculating the amount of money that is owed on the account for 30, 60, 90, or 120 days since the date of service

Question 7

asset

Answer 7

anything of value owned by an individual or business

Question 8

balancing

Answer 8

ensuring accuracy in totals by comparing them with preestablished criteria; in accounts receivable, the total of balances from individual patient statements must equal the total of accounts receivable recorded in the journal

Question 9

blank endorsement

Answer 9

only the signature of the payee appears on the back of the check

Question 10

credit

Answer 10

value added to an account, usually in the form of payment for a debt owed to that party

Question 11

currency

Answer 11

officially paper money of a country

Question 12

day sheet

Answer 12

a daily record of the services rendered, charges made, and payments received; may be a manual or computerized system

Question 13

debit

Answer 13

value subtracted from the companies’ assests

Question 14

endorsement

Answer 14

signing the back of a check as the payee for the amount represented on the front of the check

Question 15

entry

Answer 15

the recording of each transaction on the appropriate forms or components

Question 16

gross income

Answer 16

the total amount of income for the medical practice before deductions

Question 17

income

Answer 17

the amount of money a medical practice earns

Question 18

invoice

Answer 18

a bill sent from a vendor stating what was purchased and what the charges are

Question 19

journal

Answer 19

a chronologic collection of day sheets with running totals for a specific period

Question 20

liability

Answer 20

obligation; debt of the individual or business

Question 21

line of credit

Answer 21

a financial agreement between a bank or financial institution and a borrower establishing the maximum amount of money the borrower can obtain through a loan

Question 22

monthly trial balance

Answer 22

a list and total of all the debit and credit accounts for the medical practice

Question 23

net income

Answer 23

the amount of income for the medical practice after deductions

Question 24

patient ledger

Answer 24

a patient statement that is an individual form of each patient’s accounts receivable activities; often used as the patient bill

Question 25

payee

Answer 25

the person to whom the check is written; the person receiving the money

Question 26

payer

Answer 26

the person or organization giving the money to the payee

Question 27

pegboard system

Answer 27

a system of layered day sheets, patient ledgers, charge slips, and receipts; allows all entries to be made with one transaction

Question 28

petty cash

Answer 28

a small sum of money (usually less than 200$), separate from the cash drawer, used for incidental expenses)

Question 29

posting

Answer 29

transferring information from the journal (day sheet) to the accounts receivable ledger or to the individual patient’s ledgers

Question 30

purchase order

Answer 30

a document sent to a vendor via mail, fax, or the internet to purchase supplies and equipment for the medical office

Question 31

reconciliation

Answer 31

the process of verifying that the information on the bank statement agrees with the information in the check register

Question 32

Regulation Z

Answer 32

the Truth in Lending Act as recorded in the Federal Register

Question 33

restrictive endorsement

Answer 33

signature of the payee with instructions (for deposit only)

Question 34

superbill (encounter form)

Answer 34

a provided form that has all the necessary information to file an insurance claim related to that office

Question 35

Truth in Lending Act (TILA)

Answer 35

established in 1986, protects the consumer by requiring the informed use of consumer credit with all costs calculated and all terms disclosed